The Department of Justice (DOJ) Office of the Inspector General (OIG) announced today the release of a management advisory memorandum on concerns related to State Administering Agencies retroactively changing the source of subaward funding that was originally issued by the DOJ Office of Justice Programs (OJP). These concerns were identified in two OIG audit reports which were also released today: (1) an audit of victim assistance funds provided by OJP to the Wisconsin Department of Justice and subawarded to Freedom, Incorporated, in Madison, Wisconsin; and (2) an audit of victim assistance funds provided by OJP to the Illinois Criminal Justice Information Authority and subawarded to A Safe Place in Zion, Illinois.
In these two audits, the OIG found that the Wisconsin Department of Justice and the Illinois Criminal Justice Information Authority—both of which are State Administering Agencies—retroactively changed the source of funding for subawards provided to Freedom, Incorporated, and A Safe Place, respectively, without proper notification to the entities. These actions by the State Administering Agencies resulted in the subrecipients inaccurately recording federal expenses and impacted the subrecipients’ ability to comply with federal requirements, such as the establishment of adequate accounting systems or the accurate completion of federally-required audits. Not notifying entities of the funding source could also result in noncompliance with federal requirements, because the requirements of different federal grants can vary across programs and years.
The OIG believes that enhanced controls with accompanying guidance, training, and/or technical assistance are necessary to address the risk that State Administering Agencies use non-compliant methods to notify organizations of the funding source for their subawards, including when they retroactively change the funding source.
Today’s memorandum makes one recommendation to improve OJP’s controls to ensure State Administering Agencies’ compliance and awareness of federal grant requirements associated with providing subawards with multiple funding sources. OJP did not explicitly agree with the recommendation, but it described actions it will take to address it.