Audit 413991

Condition: During our testing of subrecipient monitoring activities, we noted that the Organization did not verify that subrecipients were not suspended, debarred, or otherwise excluded from participation in federal programs prior to issuing subawards. In addition, the Organization's subaward agreements did not include all information required by Uniform Guidance, such as applicable federal award identification information, indirect cost rate information, and other required terms and conditions. Criteria: 2 CFR 200.332(a) requires pass-through entities to verify that subrecipients are not suspended, debarred, or otherwise excluded from receiving federal funds. 2 CFR 200.332(b) requires pass-through entities to clearly identify federal award information and communicate specified terms and conditions within the subaward agreement, including applicable federal award identification information, indirect cost rate information, and other required compliance provisions. Cause: The Organization was not aware of the specific Uniform Guidance requirements related to verifying subrecipient eligibility and including required information in subaward agreements. As a result, the Organization had not established formal procedures to ensure compliance with these requirements. Effect: Not verifying that subrecipients are not suspended, debarred, or otherwise excluded may result in federal funds being provided to ineligible entities. Subaward agreements lacking required information may result in subrecipients not receiving critical federal award information, increasing the risk of noncompliance and questioned costs associated with federal awards. Context: The Organization had one subrecipient under the major program. We found no evidence that the Organization performed or documented a verification of subrecipient eligibility. We also noted that the subaward agreement did not contain all information required by 2 CFR 200.332(b). Recommendation: We recommend that the Organization develop and implement formal written procedures for subrecipient monitoring that include: 1. Verifying and documenting that each subrecipient is not suspended, debarred, or otherwise excluded from participation in federal programs through review of the SAM.gov or other appropriate sources. 2. Updating subaward agreements and related templates to ensure all information required by 2 CFR 200.332(b) is included. 3. Periodically reviewing subrecipient monitoring procedures and subaward agreement templates to ensure ongoing compliance with Uniform Guidance requirements. Views of Responsible Officials: Management agrees with the finding.