ACL Centers for Independent Living – Assistance Listing No. 93.435
Type of Finding: Subrecipient Monitoring/Procurement
• Material Weakness in Internal Control over Compliance
• Material Noncompliance (Modified Opinion)
Criteria or specific requirement: Per 2 CFR Part 200.331, a pass-through entity ...
ACL Centers for Independent Living – Assistance Listing No. 93.435
Type of Finding: Subrecipient Monitoring/Procurement
• Material Weakness in Internal Control over Compliance
• Material Noncompliance (Modified Opinion)
Criteria or specific requirement: Per 2 CFR Part 200.331, a pass-through entity must
make case-by-case determinations whether each agreement it makes for the
disbursement of Federal program funds casts the party receiving the funds in the role of
a subrecipient or a subcontractor. If a subrecipient has been identified, per 2 CFR Part
200, Subpart F, pass through entities must notify subrecipients that they are receiving
Federal funds as a subrecipient and must therefore comply with federal statutes,
regulations, and the terms and conditions of the award. Additionally, pass through
entities must keep documentation of monitoring the subaward. The pass-through entity
must have a control process in place to ensure it is in compliance with federal
requirements related to subrecipient monitoring. If a subcontractor has been identified
(and payment is above the micro-purchase threshold), per 2 CFR Part 200, Subpart D,
the entity must have and use documented procurement procedures such as drafting a
procurement policy, obtaining qualified bids, performing cost analyses and justifying
reason for final selection.
Condition: While there existed sophisticated procedures for reviewing, approving and
monitoring applicants, they did not meet all of the Federal requirements for either
those of subrecipients or subcontractors.
Questioned costs: $62,857 In known questioned costs.
Context: Upon receipt of the Federal ACL CARES ACT grants, the instructions were to
use and disseminate the funds within the community for the purposes of supporting
individuals with disabilities who were impacted by COVID and creating professional
relationships in further support of individuals with disabilities. DEC was not aware of the
Federal Uniform Guidance guidelines requiring DEC to make the determination of
whether the vendors meet the characteristics of a subrecipient or a subcontractor and
therefore did not follow the required procedures. This is an isolated instance due to the
specific nature of the CARES ACT funds as DEC is not able to engage in these activities
with other Federal grants.
Cause: DEC did not designate these vendors as either subrecipients or subcontractors
and therefore did not follow the Federal Uniform Guidance guidelines.
Effect: Pass-through entities, subcontractors and/or subrecipients could be out of
compliance and misusing Federal funds.
Repeat Finding: No
Recommendation: CLA recommends DEC review the Uniform Guidance in relation to
subrecipients and subcontractors, and for each vendor under contract, make a clear
determination of which type of contract they fall under. Contracts should be drafted in
conformity with either subrecipients or subcontracts (as directed by the Uniform
Guidance).
Views of responsible officials: There is no disagreement with the audit finding.
Action taken in response to finding: DEC partnered with other organizations on shortterm
projects to reach populations of individuals with disabilities who have intersecting
identities. Due to vague instructions on using the funds, we were unaware of the need
to define funding recipients as either subrecipients or subcontractors. DEC verified the
recipient’s WA state business licenses and performed monitoring for each project. These
projects were part of DEC’s plan to spend one-time CARES ACT grants. DEC is not
authorized to perform activities of this type with any of our other Federal grants.
Name(s) of the contact person(s) responsible for corrective action: Kimberly Meck,
Executive Director
Planned completion date for corrective action plan: If such an opportunity becomes
available in the future, DEC will ensure it will follow appropriate Federal regulations for
subrecipients and/or subcontractors as required.