Finding 2024-001 – Subrecipient Monitoring (Significant Deficiency)
U.S. Department of Health and Human Services
Substance Abuse and Mental Health Service Projects (93.243)
Federal Award Year: 2023-2024
Criteria and Context:
Institutions are required to follow specific subrecipient monitoring requirements to ensure compliance with federal regulations. They must assess the risk level of subrecipients before awarding funds, carefully evaluating factors such as financial stability, prior audit findings, and overall capacity to manage federal funds. Once this evaluation is complete, institutions must establish formal agreements with subrecipients, clearly outlining compliance expectations, reporting requirements, and allowable costs.
In addition to setting these agreements, institutions must engage in continuous monitoring efforts. This includes conducting financial reviews, obtaining OMB reports, performing site visits, and evaluating performance to ensure that funds are being used appropriately. If any issues arise during these monitoring activities, institutions must take corrective actions—whether by providing technical assistance, imposing additional funding conditions, or implementing other necessary measures to maintain compliance.
Furthermore, institutions are responsible for maintaining thorough records of all subrecipient monitoring activities and must report any significant findings to federal agencies. By following these protocols, institutions help ensure that federal funds are properly managed and that subrecipients adhere to all necessary regulations.
Condition:
During our audit, we noted that the University was unable to provide sufficient documentation to demonstrate that it had performed the required ongoing monitoring of subrecipients during the audit period. The absence of such documentation indicates that the University did not fully comply with the federal requirements for subrecipient monitoring.
Cause and Effect:
During the award period, the personnel responsible tor conducting subrecipient monitoring procedures left the University. Following their departure, management was unable to obtain evidence confirming that the required compliance procedure had been performed during the period.
Questioned Costs:
None noted.
Identified as a Repeat Finding:
No
Recommendation:
The University should review and strengthen its policies and procedures related to subrecipient monitoring to ensure continuity and compliance throughout the entire award period. This includes assigning clear responsibilities, implementing cross-training for key personnel, and establishing documentation protocols to ensure that monitoring activities are consistently performed and retained, even during periods of staff transition.
Views of Responsible Officials:
Management acknowledges and agrees with the finding and recommendations. The University has addressed this issue by incorporating a procedure for subrecipient monitoring into their compliance checklist. As a result, monthly reminders will be sent to a designated group within the Finance team to help prevent recurrence.
Finding 2024-002 – Procurement, Suspension and Debarment (Significant Deficiency)
U.S. Department of Health and Human Services
Substance Abuse and Mental Health Service Projects (93.243)
Federal Award Year: 2023-2024
Criteria and Context:
Institutions are required to adhere to specific requirements for procurement and suspension and debarment to ensure compliance with federal regulations. In accordance with 2 CFR Part 200, procurement processes must promote full and open competition, requiring institutions to maintain written policies, prevent conflicts of interest, and implement cost-effective purchasing methods.
When selecting vendors, institutions must assess qualifications, pricing, and past performance to ensure compliance. Contracts should clearly define expectations related to federal regulations. Additionally, before awarding contracts or subawards, institutions must confirm that vendors and subrecipients are not suspended or debarred from receiving federal funds, typically by verifying their status through SAM.gov.
Thorough documentation of procurement activities—including vendor selection, contract terms, and suspension and debarment verifications—is essential. Institutions must also conduct regular reviews of procurement practices to ensure compliance with federal guidelines and take corrective actions if noncompliance is identified. These measures help safeguard federal funds and ensure partnerships with eligible vendors and subrecipients.
Condition:
The University had not established formal procedures to verify the suspension or debarment status of vendors and subrecipients prior to issuing contracts or subawards.
Cause and Effect:
During the award period, management had personnel turnover, resulting in operational disruptions and a loss of institutional knowledge. Consequently, newly assigned staff were unfamiliar with established procedures for verifying the suspension or debarment status of vendors and subrecipients. The lack of structured knowledge transfer and training contributed to inconsistent compliance practices and increased the risk of noncompliance with federal eligibility requirements.
Questioned Costs:
None noted.
Identified as a Repeat Finding:
No
Recommendation:
The University should review and update its policies related to suspension and debarment to ensure compliance with federal requirements. Specifically, procedures should be implemented requiring personnel to verify the eligibility of all vendors and subrecipients by confirming their status through the System for Award Management (SAM.gov) prior to the execution of any federally funded contracts or subawards. This verification should be documented and retained as part of the procurement and subaward process.
Views of Responsible Officials:
Management agrees with the findings and recommendations. The University has implemented corrective actions to prevent recurrence by establishing procedures that assess the eligibility of all vendors and subrecipients, confirming their status through the System for Award Management (SAM.gov) before executing any federally funded contracts or subawards. These procedures have been incorporated into the University’s compliance checklist, which is reviewed monthly to ensure adherence.
Finding 2024-001 – Subrecipient Monitoring (Significant Deficiency)
U.S. Department of Health and Human Services
Substance Abuse and Mental Health Service Projects (93.243)
Federal Award Year: 2023-2024
Criteria and Context:
Institutions are required to follow specific subrecipient monitoring requirements to ensure compliance with federal regulations. They must assess the risk level of subrecipients before awarding funds, carefully evaluating factors such as financial stability, prior audit findings, and overall capacity to manage federal funds. Once this evaluation is complete, institutions must establish formal agreements with subrecipients, clearly outlining compliance expectations, reporting requirements, and allowable costs.
In addition to setting these agreements, institutions must engage in continuous monitoring efforts. This includes conducting financial reviews, obtaining OMB reports, performing site visits, and evaluating performance to ensure that funds are being used appropriately. If any issues arise during these monitoring activities, institutions must take corrective actions—whether by providing technical assistance, imposing additional funding conditions, or implementing other necessary measures to maintain compliance.
Furthermore, institutions are responsible for maintaining thorough records of all subrecipient monitoring activities and must report any significant findings to federal agencies. By following these protocols, institutions help ensure that federal funds are properly managed and that subrecipients adhere to all necessary regulations.
Condition:
During our audit, we noted that the University was unable to provide sufficient documentation to demonstrate that it had performed the required ongoing monitoring of subrecipients during the audit period. The absence of such documentation indicates that the University did not fully comply with the federal requirements for subrecipient monitoring.
Cause and Effect:
During the award period, the personnel responsible tor conducting subrecipient monitoring procedures left the University. Following their departure, management was unable to obtain evidence confirming that the required compliance procedure had been performed during the period.
Questioned Costs:
None noted.
Identified as a Repeat Finding:
No
Recommendation:
The University should review and strengthen its policies and procedures related to subrecipient monitoring to ensure continuity and compliance throughout the entire award period. This includes assigning clear responsibilities, implementing cross-training for key personnel, and establishing documentation protocols to ensure that monitoring activities are consistently performed and retained, even during periods of staff transition.
Views of Responsible Officials:
Management acknowledges and agrees with the finding and recommendations. The University has addressed this issue by incorporating a procedure for subrecipient monitoring into their compliance checklist. As a result, monthly reminders will be sent to a designated group within the Finance team to help prevent recurrence.
Finding 2024-002 – Procurement, Suspension and Debarment (Significant Deficiency)
U.S. Department of Health and Human Services
Substance Abuse and Mental Health Service Projects (93.243)
Federal Award Year: 2023-2024
Criteria and Context:
Institutions are required to adhere to specific requirements for procurement and suspension and debarment to ensure compliance with federal regulations. In accordance with 2 CFR Part 200, procurement processes must promote full and open competition, requiring institutions to maintain written policies, prevent conflicts of interest, and implement cost-effective purchasing methods.
When selecting vendors, institutions must assess qualifications, pricing, and past performance to ensure compliance. Contracts should clearly define expectations related to federal regulations. Additionally, before awarding contracts or subawards, institutions must confirm that vendors and subrecipients are not suspended or debarred from receiving federal funds, typically by verifying their status through SAM.gov.
Thorough documentation of procurement activities—including vendor selection, contract terms, and suspension and debarment verifications—is essential. Institutions must also conduct regular reviews of procurement practices to ensure compliance with federal guidelines and take corrective actions if noncompliance is identified. These measures help safeguard federal funds and ensure partnerships with eligible vendors and subrecipients.
Condition:
The University had not established formal procedures to verify the suspension or debarment status of vendors and subrecipients prior to issuing contracts or subawards.
Cause and Effect:
During the award period, management had personnel turnover, resulting in operational disruptions and a loss of institutional knowledge. Consequently, newly assigned staff were unfamiliar with established procedures for verifying the suspension or debarment status of vendors and subrecipients. The lack of structured knowledge transfer and training contributed to inconsistent compliance practices and increased the risk of noncompliance with federal eligibility requirements.
Questioned Costs:
None noted.
Identified as a Repeat Finding:
No
Recommendation:
The University should review and update its policies related to suspension and debarment to ensure compliance with federal requirements. Specifically, procedures should be implemented requiring personnel to verify the eligibility of all vendors and subrecipients by confirming their status through the System for Award Management (SAM.gov) prior to the execution of any federally funded contracts or subawards. This verification should be documented and retained as part of the procurement and subaward process.
Views of Responsible Officials:
Management agrees with the findings and recommendations. The University has implemented corrective actions to prevent recurrence by establishing procedures that assess the eligibility of all vendors and subrecipients, confirming their status through the System for Award Management (SAM.gov) before executing any federally funded contracts or subawards. These procedures have been incorporated into the University’s compliance checklist, which is reviewed monthly to ensure adherence.