Audit 405010

Compliance Requirement Subrecipient Monitoring Material Weakness Material Noncompliance 2024-002. The County should establish controls to ensure subrecipients are sufficiently monitored. CFDA Number 20.106 Federal Award Airport Improvement Program Federal Agency U.S. Department of Transportation Pass-through N/A – Direct Award Questioned Costs None Context There were sixteen transactions noted that were passed-through to subrecipients. Repeat Finding No Criteria The Federal Compliance Supplement and 2 CFR Section 200.332 requires pass-through entities to communicate and clearly identify to the subrecipient: 1) the award as a subaward at the time of the subaward by providing the information described in 2 CFR section 200.332(a)(1); 2) all requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and terms and conditions of the award; and 3) any additional requirements the pass-through entity imposes on the subrecipient in order to meet its own responsibility for the federal award. It also requires the pass-through entity to verify that every subrecipient is audited under the Uniform Guidance when required. Condition The County did not have an effective process in place to ensure required communications with subrecipients of federal awards and appropriate monitoring of the subrecipient’s use of federal awards occurred. There was no agreement with the subrecipient that explicitly included certain information required under 2 CFR 200.332(a)(1). Cause Management was not aware of the additional communication requirements imposed on pass-through entities. Effect Failure to monitor subrecipient’s use of federal awards could result in the erroneous or fraudulent spending of federal awards, as well as the risk the subrecipient may not be audited in accordance with the Uniform Guidance when required. Recommendation We recommend the County update its communications with the subrecipient to include the required communications of the subrecipient’s responsibilities under the federal requirements, grant agreements and award requirements including, but not limited to, its audit obligations under the Uniform Guidance. Views of Responsible Official(s) See Auditee’s Corrective Action Plan.