Audit 394332

Finding 2025-001 Monitoring of Subrecipients Research and Development Cluster National Aeronautics and Space Administration (ALN 43.001) Grant Number: 80NSSC23K1013 Statistically Valid Sample: No, and it was not intended to be Prior Year Finding: Not a repeat finding. Finding Type: Significant Deficiency and Noncompliance Criteria: According to 2 CFR 200.332(d), a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations and the terms and conditions of the subawards, and that the subaward performance goals are achieved, Accordingly, 2 CFR 200.332(d)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision on federal awards audit findings within six months of the acceptance of the report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure single audit reports are reviewed and completed in a timely manner, and management decisions are issued within required timeframes. Condition and Context: The Garden performs a comprehensive risk assessment for all subrecipients and has established monitoring procedures which are applied to each of their four subrecipients throughout the life of the grant. These procedures include a detailed review of invoices submitted for reimbursement by the subrecipient and communication with the subrecipient as needed throughout the year. While the Garden obtained a copy of the subrecipients’ single audit report during the initial risk assessment process, the Garden did not obtain or review the most recently issued single audit report for each subrecipient during 2025 to determine if there were any findings related to their federal awards which would require the Garden to issue a management decision on audit findings. Cause: Management had a control in place to obtain the subrecipient single audit reports upon entering into the subaward agreements. However, the control was not properly designed to obtain subrecipient single audit reports annually in the subsequent years the agreement was still in place.. Effect: Failure to obtain and review the subrecipient single audit reports in a timely manner may result in the Garden not being aware of a material noncompliance by a subrecipients and the Garden not documenting management’s decision timely in accordance with the guidance. Questioned Costs: No questioned costs were noted as a result of the audit procedures performed. Recommendation: We recommend the Garden establish procedures to ensure subrecipient single audit report are obtained and reviewed on an annual basis. In addition, the Garden should document whether a management decision was prepared or whether it is not required based on review of the findings, if any. Views of Responsible Officials: Management agrees with the finding. Subsequent to year end, Management has obtained and reviewed Single Audit filings for all its Subrecipients from the Federal Audit Clearinghouse. In their review of the Subrecipient Single Audit Reports, they did not note any findings related to its Federal programs. Management has implemented a control to continue to obtain and review the Single Audit filings for its Subrecipients on an annual basis.