Reference Number: 2023-003
Prior Year Finding: No
Federal Agency: U.S. Department of Treasury
Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery
Funds
Assistance Listing Number: 21.027
Award Number and Year: ARP17SL1 (5/23/2021 – 12/31/2026)
Compliance Requirement: Subrecipient ...
Reference Number: 2023-003
Prior Year Finding: No
Federal Agency: U.S. Department of Treasury
Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery
Funds
Assistance Listing Number: 21.027
Award Number and Year: ARP17SL1 (5/23/2021 – 12/31/2026)
Compliance Requirement: Subrecipient Monitoring
Type of Finding: Material Weakness in Internal Control Over Compliance,
Material Noncompliance
Criteria or specific requirement:
Compliance: 2 CFR §200.332 - Requirements for Pass-Through Entities states, in part, that all
pass-through entities must:
(a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and
includes information at the time of the subaward and if any of these data elements change,
include the changes in subsequent subaward modification. When some of this information
is not available, the pass-through entity must provide the best information available to
describe the Federal award and subaward.
Required information includes:
i. Subrecipient name (which must match the name associated with its unique entity
identifier);
ii. Subrecipient's unique entity identifier;
iii. Federal Award Identification Number (FAIN);
iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of
award to the recipient by the Federal agency;
v. Subaward Period of Performance Start and End Date;
vi. Subaward Budget Period Start and End Date;
vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the
subrecipient;
viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity
including the current financial obligation;
ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through
entity;
x. Federal award project description, as required to be responsive to the Federal Funding
Accountability and Transparency Act (FFATA);
xi. Name of Federal awarding agency, pass-through entity, and contact information for
awarding official of the Pass-through entity;
xii. Assistance Listings number and Title; the pass-through entity must identify the dollar
amount made available under each Federal award and the Assistance Listings Number at
time of disbursement;
xiii. Identification of whether the award is R&D; and
xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per
section 200.414.
(b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and
the terms and conditions of the subaward for purposes of determining the appropriate
subrecipient monitoring described in paragraphs (d) and (e) of this section, which may
include consideration of such factors as:
(1) The subrecipient's prior experience with the same or similar subawards;
(2) The results of previous audits including whether or not the subrecipient receives a
Single Audit in accordance with Subpart F - Audit Requirements of this part, and
the extent to which the same or similar subaward has been audited as a major
program;
(3) Whether the subrecipient has new personnel or new or substantially changed
systems;
(4) The extent and results of Federal awarding agency monitoring (e.g., if the
subrecipient also receives Federal awards directly from a Federal awarding
agency).
(d) 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 subaward; and that subaward performance goals are achieved. Passthrough
entity monitoring of the subrecipient must include:
(1) Reviewing financial and performance reports required by the pass-through entity.
(2) Following-up and ensuring that the subrecipient takes timely and appropriate action
on all deficiencies pertaining to the Federal award provided to the subrecipient from
the pass-through entity detected through audits, on-site reviews, and other means.
(3) Issuing a management decision for audit findings pertaining to the Federal award
provided to the subrecipient from the pass-through entity as required by § 200.521
Management decision.
(e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as
described in paragraph (b) of this section), the following monitoring tools may be useful
for the pass-through entity to ensure proper accountability and compliance with program
requirements and achievement of performance goals:
(1) Providing subrecipients with training and technical assistance on program-related
matters.
(2) Performing on-site reviews of the subrecipient's program operations.
(3) Arranging for agreed-upon-procedures engagements as described in § 200.425
Audit services.
(f) Verify that every subrecipient is audited as required by Subpart F of this part when it is
expected that the subrecipient's Federal awards expended during the respective fiscal year
equaled or exceeded the threshold set forth in § 200.501.
Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: 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. These internal controls should comply with
guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework”, issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
Prince George’s County (the County) was unable to provide support that subawards it issued
contained all required federal information nor that it properly monitored its subrecipients.
Context:
Five subrecipients were selected for testing, and the following exceptions were noted:
For one of five subrecipients, the County did not have a subaward agreement in place with
the subrecipient. As such, all required information was not furnished to the subrecipient.
Five of five subaward agreements were missing the following required information:
o Federal Award Identification Number (FAIN)
For two of five subrecipients, the County was unable to provide support that it conducted
during the award monitoring.
For one of five subrecipients, the County was unable to provide support that it had verified
that the subrecipients were audited as required by Subpart F.
Questioned costs:
Undetermined.
Cause:
The County did not establish effective internal controls and procedures over subrecipient
monitoring.
Effect:
Excluding the required federal grant award information at the time of the subaward may cause
subrecipients and their auditors to be uninformed about specific programs and other regulations
that apply to the funds they receive. There is also the potential for subrecipients to have incomplete
Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal
funds may not be properly audited at the subrecipient level in accordance with the Uniform
Guidance.
Not conducting during the award monitoring may result in a failure of the Division to detect that
its subrecipients used subawards for unauthorized purposes, managed them in violation of the
terms and conditions of the subawards, or that subaward performance goals were not achieved.
Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased
risk that subrecipients could be inappropriately spending and/or inaccurately tracking and
reporting federal funds over multiple year periods, and these discrepancies may not be properly
monitored, detected, and corrected by Division personnel on a timely basis.
Recommendation:
The County should review and enhance internal controls and procedures to ensure that all required
information is included in all subawards, that proper subrecipient monitoring is conducted, and
that evaluation of independent audits is performed.
Action taken in response to findings: OCR has submitted the subaward agreement to include
all required information for review and approval in SPEED. The subaward agreement is
awaiting approval and will be sent to the Office of Finance in April 2024.
Name of the contact person responsible for corrective action: Ameria Williams, Budget and
Human Resources Manager.
Planned completion date for corrective action plan: April 30, 2024.
Explanation of disagreement with audit findings: There is no disagreement with the audit
findings.
Views of responsible officials:
The Office of Community Relations (OCR) is reviewing and working to enhance internal controls
and procedures to ensure all required information is included in the subaward, that proper
subrecipient monitoring is conducted, and the evaluation of independent audits are performed.
OCR is working with the subrecipient to gather payroll receipts and proof of the disbursement of
funds to grantees selected through the RFPs managed by the subrecipient.
Any questions concerning the findings or corrective action plan can be directed to Euniesha Davis,
Director, OCR, at 301-952-4729.