- -

OFFICE OF 

INSPECTOR GENERAL 

U.S.DEPARTMENT OF THE INTERIOR 

U.S. Fish and Wildlife Service Grants 

Awarded to the Commonwealth of Kentucky, 

Department of Fish and Wildlife Resources, 

From July 1, 2017, Through June 30, 2019, 

Under the Wildlife and Sport Fish Restoration

Program

AUDIT

In recognition of Secretarial Order No. 3380, we are providing estimated costs 

associated with certain work products. Applying a formula involving prior salary and 

benefit expenses, we estimate the cost of preparing this report to be $164,000. 

Report No.: 2019-ER-046 November 2020
 

 

 

 

 

 

 

 

 

 

OFFICE OF 

INSPECTOR GENERAL 

U.S.DEPARTMENT OFTHE INTERIOR 

Memorandum 

To: Aurelia Skipwith 

Director, U.S. Fish and Wildlife Service 

From: Nicki Miller 

Regional Manager, Eastern Region 

Subject: Final Audit Report – U.S. Fish and Wildlife Service Grants Awarded to the 

Commonwealth of Kentucky, Department of Fish and Wildlife Resources, From 

July 1, 2017, Through June 30, 2019, Under the Wildlife and Sport Fish 

Restoration Program 

Report No. 2019-ER-046 

This report presents the results of our audit of costs claimed by the Kentucky Department 

of Fish and Wildlife Resources (Department) under grants awarded by the U.S. Fish and Wildlife 

Service (FWS) through the Wildlife and Sport Fish Restoration Program. We conducted this 

audit to determine whether the Department used grant funds and State hunting and fishing 

license revenue for allowable fish and wildlife activities and complied with applicable laws and 

regulations, FWS guidelines, and grant agreements. The audit period included claims totaling 

$70.6 million on 51 grants that were open during the State fiscal years that ended June 30, 2018, 

and June 30, 2019. 

We found that the Department generally ensured that grant funds and hunting and fishing 

license revenue were used for allowable fish and wildlife activities and complied with applicable 

laws and regulations, FWS guidelines, and grant agreements. We noted, however, issues with 

ineligible subrecipient charges. We questioned costs totaling $116,620 ($87,465 Federal share) 

as ineligible. We also determined that the Department did not comply with Federal regulations 

when managing its subawards and did not accurately report program income. 

We provided a draft of this report to the FWS. The FWS concurred with all 11 

recommendations and will work with the Department to implement corrective actions. The full 

responses from the Department and the FWS are included in Appendix 5. We list the status of

the recommendations in Appendix 6. 

Please provide us with a corrective action plan based on our recommendations by 

February 4, 2021. The plan should provide information on actions taken or planned to address 

each recommendation, as well as target dates and titles of the officials responsible for 

implementation. Please send your response to aie_reports@doioig.gov. 

Office of Audits, Inspections, and Evaluations | Herndon, VA 
 

The legislation creating the Office of Inspector General requires that we report to 

Congress semiannually on all audit reports issued, actions taken to implement our 

recommendations, and recommendations that have not been implemented. 

If you have any questions regarding this report, please contact me at 202-208-5745. 

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Contents 

Introduction......................................................................................................................................1 

Objective ....................................................................................................................................1 

Background................................................................................................................................1 

Results of Audit ...............................................................................................................................2 

Questioned Costs—$87,465 (Federal Share).............................................................................2 

Control Deficiencies ..................................................................................................................3 

Recommendations Summary ...........................................................................................................9 

Appendix 1: Scope and Methodology............................................................................................10 

Appendix 2: Sites Visited ..............................................................................................................13 

Appendix 3: Monetary Impact.......................................................................................................14 

Appendix 4: Subaward Elements...................................................................................................15 

Appendix 5: Response to Draft Report..........................................................................................16 

Appendix 6: Status of Recommendations......................................................................................22 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Introduction 

Objective 

In June 2016, we entered into an intra-agency agreement with the U.S. Fish and Wildlife Service 

(FWS) to conduct audits of State agencies receiving grant funds under the Wildlife and Sport 

Fish Restoration Program. These audits fulfill the FWS’ statutory responsibility to audit State 

agencies’ use of these grant funds. 

We conducted this audit to determine whether the Kentucky Department of Fish and Wildlife 

Resources (Department) used grant funds and State hunting and fishing license revenue for 

allowable fish and wildlife activities and complied with applicable laws and regulations, FWS 

guidelines, and grant agreements. See Appendix 1 for details about our scope and methodology. 

See Appendix 2 for sites we visited. 

Background 

The FWS provides grants to States1 through its Wildlife and Sport Fish Restoration Program 

(WSFR) for the conservation, restoration, and management of wildlife and sport fish resources. 

In addition, WSFR supports activities related to hunting and sport fishing, such as hunter 

education programs and boating access projects. 

WSFR was established by the Pittman-Robertson Wildlife Restoration Act and the DingellJohnson Sport Fish Restoration Act.2 The Acts and related Federal regulations allow the FWS to 

reimburse grantees a portion of eligible costs incurred under WSFR grants—up to 75 percent for 

States and up to 100 percent for the District of Columbia, Puerto Rico, the U.S. Virgin Islands, 

Guam, American Samoa, and the Northern Mariana Islands. The reimbursement amount is called 

the Federal share. The Acts require that hunting and fishing license revenue be used only for the 

administration of State fish and wildlife agencies. In addition, Federal regulations require States 

to account for any income earned from grant-funded activities and to spend this income before 

requesting grant reimbursements. 

1 The Wildlife and Sport Fish Restoration Program defines the term “State” to include the District of Columbia, the 

Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern 

Mariana Islands. 

2 Formally known, respectively, as the Federal Aid in Wildlife Restoration Act, 16 U.S.C. § 669, as amended, and the Federal 

Aid in Sport Fish Restoration Act, 16 U.S.C. § 777, as amended. 

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Results of Audit 

We determined that the Department generally ensured that grant funds and State fishing license 

revenue were used for allowable fish and wildlife activities and complied with applicable laws 

and regulations, FWS guidelines, and grant agreements. We noted, however, issues with 

ineligible subrecipient charges, subaward mismanagement, and inaccurate program income 

reporting. 

We found the following: 

• Questioned Costs. We questioned $116,620 ($87,465 Federal share) as ineligible

because the University of Tennessee was not able to support equitable cost allocation

among entities participating in the National Bobwhite Conservation Initiative (NBCI).

• Control Deficiencies. The Department did not comply with Federal regulations when

managing its subawards. Further, the Department did not accurately report program

income.

See Appendix 3 for a statement of monetary impact. 

Questioned Costs—$87,465 (Federal Share) 

Ineligible Subrecipient Charges—Questioned Costs of $87,465 

During State fiscal year 2018, the FWS awarded $200,000 to the Department under 

Grant No. F18AF00044. The Department then entered into a subaward agreement with the 

University of Tennessee NBCI to complete a rangewide habitat plan for recovering bobwhite 

quail species. The NBCI provided similar services detailed under the grant to other participating 

States. The NBCI also received funding from external partners, including nonprofit 

nongovernmental organizations, and other Federal agencies, some of which provided funding to 

the NBCI using non-Federal funds. 

In a separate review, we determined that the NBCI did not properly split or allocate expenditures 

among all participating States and external partners. The NBCI did not have a policy or a sound 

and reasonable methodology to determine and allocate assignable expenditures among all 

participating States and external partners in proportion to the received benefits. Instead, NBCI 

officials described the funding as one “pot” of money from which to pay for expenses that 

benefited all participating States and external partners. This practice does not ensure 

expenditures are properly allocated to Federal grants. 

In 2018, the NBCI implemented a new accounting methodology and procedures referred to as a 

recharge center to better allocate assignable grant expenditures. These new procedures are 

outside the scope of our audit; however, we separately evaluated whether grant costs claimed 

using this new methodology can reasonably allocate costs in proportion to the benefit provided. 

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We issued a management advisory to the FWS to address the issue of costs claimed using the 

recharge center method.3 

The Code of Federal Regulations (2 C.F.R. § 200.403) states that costs must be allocable to the 

Federal award in order to be allowable. Under 2 C.F.R. § 200.405, a cost is allocable to a 

particular award if the goods and services involved are chargeable or assignable to that Federal 

award in accordance with the relative benefits received. Costs are also allocable if, when such 

costs benefit both the Federal award and other work of the non-Federal entity, they are 

distributed in proportions that may be approximated using reasonable methods. In addition, 

2 C.F.R. § 200.405(d) states that if a cost benefits two or more projects or activities in 

proportions that can be determined without undue effort or cost, the cost must be allocated to the 

projects based on the proportional benefit. 

The NBCI did not have adequate accounting methodologies that allowed for proper allocation of 

expenditures among participating States and external partner accounts. Because the NBCI did 

not (1) properly allocate the expenditures among all participating States and external partners in 

proportion to the received benefits, and (2) distribute the costs using a reasonable methodology, 

we consider the expenditures unallocable to Federal awards. Therefore, these costs are ineligible 

to be charged to WSFR grants. 

We question $116,620 ($87,465 Federal share) that the Department paid to the University of 

Tennessee under Grant No. F18AF00044 as unallocable expenditures. 

Recommendation 

We recommend that the FWS work with the Department to: 

1. Resolve the ineligible questioned costs related to the NBCI subaward 

agreement totaling $87,465 (Federal share) 

Control Deficiencies 

Subaward Management Did Not Meet Federal Regulations 

We found that the Department did not always conduct risk assessments and did not develop any 

monitoring plans for its subrecipients. Additionally, the Department’s subaward agreements did 

not contain all the required elements. Beginning in December 2014, Federal regulations require 

the pass-through entity (the Department) to evaluate the subrecipient’s risk of noncompliance 

and to monitor the activities of the subrecipient, as necessary, in compliance with Federal 

statutes. Additionally, Federal regulations require pass-through entities to ensure that each 

subaward agreement is clearly identified to the subrecipient as a subaward and that the subaward 

agreement includes 18 specific elements. 

3 Issues Identified With Wildlife Restoration Subawards to the University of Tennessee, National Bobwhite Conservation 

Initiative (Report No. 2020-WR-019), dated July 2020. 

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In response to the 2014 changes, the Department developed and implemented policies and 

procedures to identify subrecipients in April 2019. The Department also developed and 

implemented policies and procedures to conduct risk assessments but did not address developing 

monitoring plans. We reviewed all four subawards the Department identified since implementing 

those policies and procedures. The Department awarded three subawards to the University of 

Tennessee and one subaward to the University of Kentucky totaling $296,302. 

The Department Did Not Conduct Risk Assessments or Develop Monitoring Plans 

We found that the Department did not conduct risk assessments for three of its four subrecipients 

and did not develop monitoring plans for any of its subrecipients. In October 2019, the 

Department conducted one risk assessment for the University of Tennessee NBCI but did not 

develop a monitoring plan. 

Because it lacked adequate risk assessments and monitoring plans, the Department was not in 

compliance with 2 C.F.R. § 200.331(b) and (d) and did not ensure that subrecipients are 

complying with Federal regulations. Consequently, the Federal award is at risk of misuse and the 

Department may be at risk of losing WSFR funds. 

Subawards Lacked Required Elements 

The Department’s subaward agreements did not contain 14 of the 18 elements required by 

2 C.F.R. § 200.331. See Appendix 4 for a detailed listing of the required subaward elements. As 

a result, the Department’s practices for preparing subaward agreements were not in compliance 

with the Federal regulations. This occurred because the Department did not classify the 

agreements as subawards before issuing the awards, and thus did not identify the 18 required 

legal elements in its agreements. For example, the Department’s subaward agreements did not 

indicate that the Department was a pass-through entity for a Federal award. Consequently, the 

Department could potentially be in noncompliance with the terms and conditions of the Federal 

award. 

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Recommendations 

We recommend that the FWS work with the Department to: 

2. Develop and implement policies and procedures to conduct and evaluate risk 

assessments for its identified subrecipients to ensure the subrecipients’ 

compliance with Federal regulations 

3. Develop and implement policies and procedures to develop monitoring plans 

for its identified subrecipients to ensure the subrecipients’ compliance with 

Federal regulations 

4. Develop and implement policies and procedures to ensure subaward 

agreements comply with Federal regulations 

5. Ensure Department personnel receive training on how to execute subaward 

agreements 

Inaccurate Program Income Reporting 

We found that the Department did not report program income from canteen sales and crop leases 

when it was earned. In addition, the Department did not report revenue generated from crop 

leases and timber sales on one of its wildlife management areas as program income. 

Federal regulations (2 C.F.R. § 200.80) define program income as income earned by a supported 

activity or as a result of the Federal award during the period of performance and require the 

Department to report that program income when earned and credit the income to the correct 

grant between the effective start date of the award and the end date of the award. In addition, 

50 C.F.R. § 80.124 allows the Department to use unexpended program income under a 

subsequent grant for any activity eligible for funding in the grant program that generated the 

income. 

Untimely Reporting of Program Income from Canteen Sales 

The Department did not report or use program income collected from the sale of merchandise at 

its three camp canteens during the grant period in which it was earned on three hunter education 

grants. 

The Department’s fiscal staff did not transfer the program income generated at its three camp 

canteens during the summer (early June to mid-August) from the local bank account to the 

Department’s State account at the end of camp season. As a result, the Department reported and 

used the program income on the next open hunter education grant; thus, reporting and using the 

program income outside of the grant period. Three grants were affected by this inaccurate 

reporting process (see Figure 1). 

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Grant No. Deposit Grant No. 

Earned End Date Amount ($) Transfer Date Applied 

F16AF01049 Sept. 30, 2017 3,438 and 1,573 June 2018 F17AF01032 

F17AF01032 Sept. 30, 2018 52,575 Oct. 2018 F18AF01073 

F18AF01073 Sept. 30, 2019 53,258 Jan. 2020* 

 

 

 

 

 

 

 

 

 

 

Figure 1: Grants Affected by Inaccurate Program Income Reporting 

*The Department initially incorrectly left off the program income on the Federal financial

form for the grant but properly reported it on a revised Federal financial form based on our

audit.

The Department has 90 days to close the grant and file the Federal financial report; instead, the 

Department reported the program income on the next open grants. The Department is required to 

expend any program income prior to drawing down funds on the grants. 

Although the Department has policies and procedures in place to set up the cash registers for the 

start of camp season, it does not have any policies and procedures to close out and deposit the 

revenue generated for the duration of camp. The Department lacked written policies and 

procedures for transferring revenue monthly after it reconciled the local bank statements with the 

weekly deposits the camp directors made. In addition, Department personnel did not have proper 

oversight or accountability to ensure that the revenue had been transferred. As a result, the 

Department’s practice of transferring and reporting program income outside the period of 

performance is not in compliance with Federal regulations. 

Untimely Reporting of Crop Lease Program Income 

The Department did not report program income generated from crop leases on the grants in 

which the income was earned. The Department has crop leases that run from April to December 

that generate program income on its wildlife management areas. The grants to which they apply 

run from October to September. We determined that although the lease ends outside the grant 

period, the revenue generated is earned during the grant period and therefore should and could be 

reported on the Federal financial reports for those grants that end in September, even if the final 

crop lease payments do not come in until December. 

The Department has 90 days after the end of the grant period to close out any revenues or 

expenditures related to that grant. The Department may report the income as earned and also 

identify any funds received after September 30 as unexpended program income that can be used 

on the subsequent grant. Thus, it should report the income as earned on the grant ending in 

September. The Department may also request an additional 90 days from the FWS to submit the 

Federal financial reports if it needs more time. 

Personnel stated the Department is on the cash basis of accounting and therefore cannot report 

income earned on the grant until it receives the cash in hand. Department personnel told us they 

believed that because the performance period had ended, the income received afterward should 

be attributed to the next grant. The Department did not consider that although the income was 

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received after the grant had ended, the program income was earned during the performance 

period and therefore it belonged under the previous grant. 

As a result, the Department was not in compliance with Federal regulations because it did not 

report program income earned during the performance period of the grant. The current alignment 

of the performance period of the grants with the crop leases allows the Department to report 

program income on the grant in which it was earned, but does not provide enough time for the 

Department to spend that program income on the same grant. In this situation, the Department 

should carry over the program income onto the next grant and report it as unexpended program 

income on the closing grant, which the FWS has noted as a best practice for the States. The 

Department must also spend the unexpended program income before any drawdowns can take 

place on the open grant. 

Unreported Program Income 

We determined that the Department did not report program income generated on the Taylorsville 

Wildlife Management Area as required by 50 C.F.R. § 80.121. We identified approximately 

$32,178 in unreported program income from crop leases and timber sales on two Statewide 

Wildlife Management grants (Grant Nos. F17AF01173 and F18AF00981) that were open during 

our audit period. The Department leases this property from the Army Corps of Engineers and 

manages the property with WSFR and State funds. 

The Department did not report this program income on the grants on which it was earned, and 

thus was not in compliance with 2 C.F.R. § 200.80. Further, the Department did not use the 

unreported program income on the grant on which it was earned. 

The Department has since changed this practice and does not manage the property with WSFR 

funds. The Department has developed templates for the Taylorsville staff to use when working 

on the property to ensure they do not charge the WSFR grant for activities on the Taylorsville 

Wildlife Management Area, which should resolve the unreported program income on future 

grants. 

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Recommendations 

We recommend that the FWS work with the Department to: 

6. Establish policies and procedures to ensure timely transfer, use, and reporting

of program income at its camp canteens

7. Properly account for the program income generated and earned during the

grant period ending in September of each year

8. Report any unexpended program income earned as a result of the crop

production leases on the grant ending in September of each year

9. Acknowledge expenditure of the unexpended program income on the new

grant starting in October of each year

10.Ensure that all Department staff involved in estimating, reporting, and

collecting program income receive current training on program income

reporting and use

11.Report and spend the $32,178 of unreported program income in accordance

with grant terms

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Recommendations Summary 

We provided a draft of this report to the FWS. The Department agreed with all recommendations 

with the exception of Recommendation 1, noting that the FWS provided advice and approval for 

the subaward agreement. The FWS concurred with all 11 of our recommendations and will work 

with the Department to implement corrective actions. We consider all 11 recommendations 

resolved but not implemented. See Appendix 5 for the full text of the Department’s and FWS’ 

responses; Appendix 6 lists the status of each recommendation. 

We recommend that the FWS work with the Department to: 

1. Resolve the ineligible questioned costs related to the NBCI subaward agreement totaling 

$87,465 (Federal share) 

2. Develop and implement policies and procedures to conduct and evaluate risk assessments 

for its identified subrecipients to ensure the subrecipients’ compliance with Federal 

regulations 

3. Develop and implement policies and procedures to develop monitoring plans for its 

identified subrecipients to ensure the subrecipients’ compliance with Federal regulations 

4. Develop and implement policies and procedures to ensure subaward agreements comply 

with Federal regulations 

5. Ensure Department personnel receive training on how to execute subaward agreements 

6. Establish policies and procedures to ensure the timely transfer, use, and reporting of 

program income at its camp canteens 

7. Properly account for the program income generated and earned during the grant period 

ending in September of each year 

8. Report any unexpended program income earned as a result of the crop production leases 

on the grant ending in September of each year 

9. Acknowledge expenditure of the unexpended program income on the new grant starting 

in October of each year 

10. Ensure that all Department staff involved in estimating, reporting, and collecting program 

income receive current training on program income reporting and use 

11. Report and spend the $32,178 of unreported program income in accordance with grant 

terms 

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Appendix 1: Scope and Methodology 

Scope 

We audited the Kentucky Department of Fish and Wildlife Resources’ (Department’s) use of 

grants awarded by the U.S. Fish and Wildlife Service (FWS) under the Wildlife and Sport Fish 

Restoration Program (WSFR). The audit period included claims totaling $70.6 million on 51 

grants that were open during the State fiscal years (SFYs) that ended June 30, 2018, and June 30, 

2019. 

Methodology 

We conducted this performance audit in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained provides a reasonable basis 

for our findings and conclusions based on our audit objectives. 

We assessed whether internal control was significant to the audit objective. We determined that 

the Department’s control activities and the following related principles were significant to the 

audit objectives: 

• Management should design control activities to achieve objectives and respond to risks.

• Management should design the entity’s information system and related control activities

to achieve objectives and respond to risks.

• Management should implement control activities through policies.

We tested the operation and reliability of internal control over activities related to our audit 

objective. Our tests and procedures included: 

• Examining the evidence that supports selected expenditures charged to the grants by the

Department

• Reviewing transactions related to purchases, direct costs, drawdowns of reimbursements,

in-kind contributions, and program income

• Interviewing Department employees to ensure that personnel costs charged to the grants

were supportable

• Inspecting equipment and other property

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• Determining whether the Department used fishing license revenue for the administration

of fish and wildlife program activities

• Determining whether the Commonwealth passed required legislation assenting to the

provisions of the Pittman-Robertson Wildlife Restoration Act and the Dingell-Johnson

Sport Fish Restoration Act

• Evaluating Commonwealth policies and procedures for assessing risk and monitoring

subawards

• Visiting sites throughout the Commonwealth (see Appendix 2 for a list of sites visited)

We found deficiencies in internal control resulting in our three findings of ineligible subrecipient 

charges, subaward mismanagement, and inaccurate program income reporting. 

Based on the results of our initial assessments, we assigned a level of risk and selected a 

judgmental sample of transactions for testing. We used auditor judgement and considered risk 

levels relative to other audit work performed to determine the degree of testing performed in 

each area. Our sample selections were not generated using statistical sampling, and therefore we 

did not project the results of our tests to the total population of transactions. 

This audit supplements, but does not replace, the audits required by the Single Audit Act 

Amendments of 1996. Single audit reports address controls over Statewide financial reporting, 

with emphasis on major programs. Our report focuses on the administration of the Kentucky fish 

and wildlife agency, and that agency’s management of WSFR resources and license revenue. 

The Department provided computer-generated data from its official accounting system and from 

informal management information and reporting systems. We tested the data by sampling 

expenditures and verifying them against WSFR reports and source documents such as purchase 

orders, invoices, and payroll documentation. While we assessed the accuracy of the transactions 

tested, we did not assess the reliability of the accounting system as a whole. 

Prior Audit Coverage 

OIG Audit Reports 

We reviewed our last two audits of costs claimed by the Department on WSFR grants.4 We 

followed up on one recommendation from these reports and found that the U.S. Department of 

the Interior’s Office of Policy, Management and Budget considered the recommendation as 

resolved and implemented. 

4 U.S. Fish and Wildlife Service Wildlife and Sport Fish Restoration Program Grants Awarded to the Commonwealth of 

Kentucky, Department of Fish and Wildlife Resources, From July 1, 2007, Through June 30, 2009 (Report No. R-GR-FWS0012-2010), dated November 2010. 

U.S. Fish and Wildlife Service Wildlife and Sport Fish Restoration Program Grants Awarded to the Commonwealth of Kentucky, 

Department of Fish and Wildlife Resources, From July 1, 2012, Through June 30, 2014 (Report No. 2015-EXT-004), dated 

August 2015. 

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State Audit Reports 

We reviewed the single audit reports for SFYs 2017 and 2018 to identify control deficiencies or 

other reportable conditions that affect WSFR. In those reports, the Schedule of Expenditures of 

Federal Awards indicated $26 million (combined) in Federal expenditures related to WSFR but 

did not include any findings directly related to WSFR, which was not deemed a major program 

for Statewide audit purposes. Neither of these reports contained any findings that would directly 

affect the WSFR grants. 

We also reviewed the report of the Kentucky State Auditor’s Examination of Certain Operations 

and Financial Activity of the Department. The report had 11 findings directly impacting the 

Department; however, the Department responded to the auditor’s report by providing a plan of 

action to address all the findings. Based on our review of the auditor’s report, we determined the 

Department had issues with internal control and we considered this as a risk indicator when we 

prepared our audit procedures and tests. 

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Appendix 2: Sites Visited 

Headquarters Frankfort 

Fisheries Offices Northeastern District 

Peter W. Pfeiffer Fish Hatcheries Minor Clark 

Cave Run Lake Boating Access Facilities Bullock Pen Lake 

West Kentucky 

Dr. James R. Rich Wildlife Management Areas Veteran’s Memorial 

Clay 

Hunter Education Facilities Kleber Shooting Range 

Camp Currie Other Otter Creek Outdoor Recreation Area 

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Questioned 

Costs ($) 

(Federal Share) 

Cost 

Grant No. Grant Title Category Ineligible 

F18AF00044 National Bobwhite 

Conservation Initiative Subawards 87,465 

Total $87,465 

Appendix 3: Monetary Impact 

The audit period included claims totaling $70.6 million on 51 grants that were open during the 

State fiscal years that ended June 30, 2018, and June 30, 2019. We questioned $116,620 

($87,465 Federal share) as ineligible. These questioned costs arose due to unallocable costs. 

Monetary Impact: Questioned Costs 

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Required Subaward Elements Included (Y/N) 

Subrecipient name Y 

Subrecipient unique entity identifier N 

Federal Award Identification Number N 

Federal award date of award to the recipient by the Federal agency N 

Subaward period of performance start and end date Y 

Amount of Federal funds obligated by this action by the PTE to the 

subrecipient 

N 

Total amount of Federal funds obligated to the subrecipient by the 

PTE 

N 

Total amount of the Federal award committed to the subrecipient 

by the PTE 

N 

Federal award project description, as required to be responsive to 

the FFATA 

Y 

Name of Federal awarding agency , PTE, and contact information 

for awarding official of the PTE 

N 

CFDA number and name N 

Identification of whether the award is R&D N 

Indirect cost rate for the Federal award N 

All requirements the PTE imposes on the subrecipient so that the 

Federal award is used in accordance with Federal statutes, 

regulations and the terms and conditions of the Federal award 

N 

Any additional requirements that the PTE imposes on the 

subrecipient for the PTE to meet its own responsibilit y to the 

Federal awarding agency 

N 

The approved federally recognized indirect cost rate N 

A requirement that the subrecipient permit the PTE and auditors to 

have access to the subrecipient's records and financial statements 

as necessary 

Y 

Abbreviations: CFDA = Catalog of Federal Domestic Assistance, FFATA = Federal Funding 

Accountability and Transparency Act , PTE = p ass-through entity, R&D = r esearch and 

development 

Appendix 4: Subaward Elements 

15 
Appendix 5: Response to Draft Report 

The combined Kentucky Department of Fish and Wildlife Resources and U.S. Fish and Wildlife 

Service response to our draft report follows on page 17. 

16 
United States Department of the Interior 

FISH AND WILDLIFE SERVICE 

1875 Century Blvd 

Atlanta, Georgia 

30345 

September 1 7, 2020 

IN REPLY REFER TO: 

FWS/R2/R4/WSFR 

Nicki Miller, Regional Manager, Eastern Region 

U.S. Department of the Interior 

Office of Inspector General 

381 Elden Street, Suite 3000 

Herndon, VA 20170 

Re: Draft Audit Report- U.S. Fish and Wildlife Service Grants Awarded to the State of 

Kentucky, Department of Fish and Wildlife Resources, From July 1, 2017, Through 

June 30, 2019 Under the Wildlife and Sport Fish Restoration Program. Report No. 

2019-ER-046, Issued August 3, 2020 

Dear Ms. Miller: 

The enclosed response to the draft audit report referenced above was developed by the State of 

Kentucky Department of Fish and Wildlife Resources in cooperation with the U.S. Fish and Wildlife 

Service South Atlantic - Gulf and Mississippi Basin Unified Regions Wildlife and Sport Fish 

Restoration Program. 

If you have any questions or need additional information, please contact Alex Coley at 

(404) 679-7242. 

Sincerely, 

Digitally signed by MARILYN MARILYN LAWAL 

Date: 2020.09.17 LAWAL 13:32:41 -04'00' 

Marilyn H. Lawal-Carter, Acting Manager 

Wildlife and Sport Fish Restoration 

Enclosure 

Cc: Ord Bargerstock, Shuwen Cheung 

Division of Financial Assistance Support and Oversight 

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Response to Draft Report 

U.S. FISH AND WILDLIFE SERVICE 

WILDLIFE AND SPORT FISH RESTORATION PROGRAM 

Grants Awarded to the Commonwealth of Kentucky, Department of Fish and Wildlife 

Resources 

From July 1, 2017, Through June 30, 2019 

Report No. 2019-ER-046, Issued August 3, 2020 

Auditor Recommendation 1 

The auditors recommend that the FWS work with the Department to resolve the ineligible 

questioned costs related to the NBCI subaward agreement totaling $87,465 (Federal share). 

Agency Response 

The Agency does not agree with the finding. The Agency was advised by FWS on how to enter 

into this agreement and the Agency has approval from FWS for this agreement. 

Service Response 

The Service concurs with the auditor’s finding. 

Auditor Recommendation 2 

The auditors recommend that the FWS work with the Department to develop and implement 

policies and procedures to conduct and evaluate risk assessments for its identified subrecipients 

to ensure the subrecipients’ compliance with Federal regulations. 

Agency Response 

The Agency agrees with the finding and will address the recommendation in a pending 

Corrective Action Plan. 

Service Response 

The Service concurs with the auditor’s finding. 

Auditor Recommendation 3 

The auditors recommend that the FWS work with the Department to develop and implement 

policies and procedures to develop monitoring plans for its identified subrecipients to ensure the 

subrecipients’ compliance with Federal regulations. 

18
 

 

 

 

 

Agency Response 

The Agency agrees with the finding and will address the recommendation in a pending 

Corrective Action Plan. 

Service Response 

The Service concurs with the auditor’s finding. 

Auditor Recommendation 4 

The auditors recommend that the FWS work with the Department to develop and implement 

policies and procedures to ensure subaward agreements comply with Federal regulations. 

Agency Response 

The Agency agrees with the finding and will address the recommendation in a pending 

Corrective Action Plan. 

Service Response 

The Service concurs with the auditor’s finding. 

Auditor Recommendation 5 

The auditors recommend that the FWS work with the Department to ensure Department 

personnel receive training on how to execute subaward agreements. 

Agency Response 

The Agency agrees with the finding and will address the recommendation in a pending 

Corrective Action Plan. 

Service Response 

The Service concurs with the auditor’s finding. 

Auditor Recommendation 6 

The auditors recommend that the FWS work with the Department to establish policies and 

procedures to ensure timely transfer, use, and reporting of program income at its camp canteens. 

Agency Response 

The Agency agrees with the finding and will address the recommendation in a pending 

Corrective Action Plan. 

19
 

 

 

 

 

 

 

 

Service Response 

The Service concurs with the auditor’s finding. 

Auditor Recommendation 7 

The auditors recommend that the FWS work with the Department to properly account for the 

program income generated and earned during the grant period ending in September of each year. 

Agency Response 

The Agency agrees with the finding and will address the recommendation in a pending 

Corrective Action Plan. 

Service Response 

The Service concurs with the auditor’s finding. 

Auditor Recommendation 8 

The auditors recommend that the FWS work with the Department to report any unexpended 

program income earned as a result of the crop production leases on the grant ending in 

September of each year. 

Agency Response 

The Agency agrees with the finding and will address the recommendation in a pending 

Corrective Action Plan. 

Service Response 

The Service concurs with the auditor’s finding. 

Auditor Recommendation 9 

The auditors recommend that the FWS work with the Department to acknowledge expenditure of 

the unexpended program income on the new grant starting in October of each year. 

Agency Response 

The Agency agrees with the finding and will address the recommendation in a pending 

Corrective Action Plan. 

Service Response 

The Service concurs with the auditor’s finding. 

20
 

 

 

 

 

 

Auditor Recommendation 10 

The auditors recommend that the FWS work with the Department to ensure that all Department 

staff involved in estimating, reporting, and collecting program income receive current training on 

program income reporting and use. 

Agency Response 

The Agency agrees with the finding and will address the recommendation in a pending 

Corrective Action Plan. 

Service Response 

The Service concurs with the auditor’s finding. 

Auditor Recommendation 11 

The auditors recommend that the FWS work with the Department to report and spend the 

$32,178 of unreported program income in accordance with grant terms. 

Agency Response 

The Agency agrees with the finding and will address the recommendation in a pending 

Corrective Action Plan. 

Service Response 

The Service concurs with the auditor’s finding. 

21
 

Recommendation Status Action Required 

 

 

 

 

1 – 11 

Resolved but not 

implemented: 

U.S. Fish and Wildlife Service 

(FWS) regional officials 

concurred with these 

recommendations and will 

work with staff from the 

Kentucky Department of Fish 

and Wildlife Resources to 

develop and implement a 

corrective action plan. 

 

 

 

 

 

 

 

 

 

 

Complete a corrective action 

plan that includes information 

on actions taken or planned to 

address the recommendations, 

target dates and titles of the 

officials responsible for 

implementation, and 

verification that FWS 

headquarters officials reviewed 

and approved the actions the 

Department has taken or 

planned. 

We will refer the 

recommendations not 

implemented at the end of 90 

days (after February 4, 2021) 

to the Assistant Secretary for 

Policy, Management and 

Budget to track 

implementation. 

Appendix 6: Status of Recommendations 

22 
Report Fraud, Waste,

and Mismanagement

Fraud, waste, and mismanagement in

Government concern everyone: Office 

of Inspector General staff, departmental 

employees, and the general public. We 

actively solicit allegations of any 

inefficient and wasteful practices, fraud, 

and mismanagement related to 

departmental or Insular Area programs 

and operations. You can report 

allegations to us in several ways.

 By Internet: www.doioig.gov

 By Phone: 24-Hour Toll Free: 800-424-5081

Washington Metro Area: 202-208-5300

 By Fax: 703-487-5402

 By Mail: U.S. Department of the Interior

Office of Inspector General

Mail Stop 4428 MIB

1849 C Street, NW.

Washington, DC 20240