By Adam Pagnucco.
After two county audits found problems in a federally funded grant to immigrant rights group CASA, the Prince William Board of County Supervisors has voted to strip $1.5 million from CASA and reallocate it to other service providers.
During the pandemic, Prince William County received $91 million in federal American Rescue Plan Act (ARPA) funding. The county then awarded grants distributing some of this money to a group of subrecipient organizations to carry out eligible services. One of the subrecipients was CASA, which was awarded $2 million for construction of a training lab along with programming start-up costs.
A county audit dated June 26, 2023 found problems in CASA’s handling of these ARPA funds. Concerning CASA, the audit made two observations:
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Observation 1: Per review of the subrecipient agreement and through discussion with the County, only programming and administrative costs related to the Welcome Center (2359 Research Court Woodbridge VA) are an allowable use of funds. The lease agreement between CASA and CNM Old Bridge is related to another Virginia location and is not an allowable use of the County’s ARPA SLFRF funds. The invoice examined during detailed testing procedures was in the amount of $3,529. The cumulative expenditures for this vendor during the audit period were $25,078 based on the general ledger detail provided.
Observation 2: All federal grants are subject to compliance with OMB’s Uniform Guidance. Within the Uniform Guidance, 2 CFR 200.320 outlines the methods of procurement to be adhered to when acquiring property or services under a Federal award or sub-award. Per 2 CFR 200.320(a), informal procurement methods may be used “when the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined under 2 CFR 200.1, or a lower threshold established by a non-federal entity”. The procurement policy for CASA requires purchases between $4,000 and up to $20,000 to obtain two (2) written quotes. The local procurement policy further states that purchases in excess of $20,000 require a request for proposal be prepared and three (3) written quotes be obtained. Uniform Guidance requires purchases above the micro-purchase threshold and below the SAT ($250,000) to obtain quotes from an adequate number of sources (generally three (3)). There were three (3) expenditures totaling $33,500 selected for testing and found to be non-compliant with procurement requirements under 2 CFR 200.320 as well as their local procurement policy.
We discussed the results with CASA and the County, and as a result of the observations noted during testing, the County requested we expand the sample of transactions. The results of this expanded sample will be included within a future amendment to this report. All observations noted will not be eligible for reimbursement with ARPA funding. CASA has been notified that they should seek to replace ineligible costs with eligible uses within the allowable period of performance, as to take advantage of the full awarded ARPA funds.
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So the county’s auditor found that CASA was using federal money for non-allowable uses and was not complying with federal and local procurement policies. The auditor claimed that this was discussed with CASA and the county and that the county requested more work by the auditor. This was followed by another county audit dated December 20, 2023. This audit contained the findings of the previous audit and added the following:
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Subrecipient CASA
Period: July 1, 2022 – December 31, 2022
Status: Complete
Due to the results of the Q1 and Q2 FY 2023 monitoring and in an effort to maintain compliance with Federal Statutes, regulations and the term and conditions of the subaward, the County elected to perform 100% reviews for all invoices previously submitted and all submissions going forward. Observations amount to $120,032 out of the $155,847 requested, detailed below:
a. Procurement – CASA was unable to provide documentation to support that procurement methods were in compliance with 2 CFR 200.320. This impacted fifteen (15) vendors, totaling $92,716.
b. Site location – Identified $26,789 of administrative costs related to CASA locations separate from the project location, Welcome Center located at 2359 Research Court.
c. Ineligible Cost – Identified one (1) expenditure totaling $527 for an employee’s English as a Second Language course. Upon review it was determined these purchases were not in alignment with the allowable costs outlined in their respective grant agreement with the County.
Period: January 1, 2023 – March 31, 2023
Status: In Progress
CASA has a total of $49,442 of observations out of the $118,051 requested, detailed below:
a. Procurement -CASA was unable to provide documentation to support that procurement methods were in compliance with 2 CFR 200.320. This impacted nine (9) vendors, totaling $46,898. This is a carryover comment from prior testing, as results from the initial testing of CY 2022 were not complete until June 2023.
b. Ineligible cost – Two (2) purchases totaling $2,544 were made for marketing items such as: lip balm, hand sanitizer, drawstring bags, hoodies, etc. Upon review it was determined these purchases were not in alignment with the allowable costs outlined in their respective grant agreement with the County.
There is one (1) item which remains outstanding, amounting to $36,124.
Period: April 1, 2023 – June 30, 2023
Status: Complete
CASA has a total of $27,802 of observations out of the $32,699 requested, detailed below:
a. Procurement – CASA was unable to provide documentation to support procurement methods were in compliance with 2 CFR 200.320. This impacted nine (9) vendors, totaling $20,302. This is a carryover comment from prior testing, as results from the initial testing of CY 2022 were not complete until June 2023.
b. Ineligible cost – Two (2) purchases totaling $5,600 were made for marketing items such as: lanyards, thermometers, sunscreen, pill boxes, fidget fun blocks, etc. Upon review it was determined these purchases were not in alignment with the allowable costs outlined in their respective grant agreement with the County.
c. Duplicate invoice – One (1) purchase for $1,900 was identified as a duplicate expense.
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This page from the December audit shows the above findings on CASA’s federal money award.
Together, the two audits document use of federal money for other site locations and ineligible costs as well as an inability to document compliance with federal and local procurement requirements. It’s also noteworthy that the auditor claimed to discuss this with CASA in the earlier audit and found more issues in the second one.
Inside NOVA reported on February 18 that the county was considering reallocating CASA’s funding to other service providers. The article noted that two supervisors declined to discuss the issue because “CASA’s legal counsel was considering taking action against the board.” On February 21, the supervisors voted 6-2 to strip $1.5 million from CASA and instead direct it to a group of other providers. The Prince William Times reported, “The move came after internal audits of CASA’s spending showed that about $197,000 of the $300,000 in expenses it submitted were ineligible for the federal funding. The audit found that at times the nonprofit didn’t follow federal procurement rules, either by not seeking enough bids for services or not submitting the right paperwork.” Supervisors who voted to strip the money expressed concern about whether CASA could spend it by a deadline of December 31.
In the wake of controversy following CASA’s comments on Israel and Hamas last fall, NBC4 reported, “Some also want an audit of CASA’s use of taxpayer dollars. CASA said it welcomes any audit because it hasn’t done anything wrong.”
The Montgomery County internal audit program’s report listing contains no search results for CASA. I have asked a representative of Montgomery County’s executive branch whether the county government is auditing any of its numerous contracts with CASA (which include non-competitive awards) at this time. I will update this post when I receive a response.