Finding Text
2022/2023-009 Monitoring Subrecipients
CFDA Title: Drinking Water State Revolving Fund CFDA Number: 66.468
Federal Award Number: Fiscal Year Ended June 30, 2023 Award #WRF-22515 and #WRF-22516
Federal Agency: United States Environmental Protection Agency
Pass-through Entity: Montana Department of Natural Resources and Conservation Subrecipient: North
Central Regional Water Authority
Condition:
The Town reimbursed North Central Regional Water Authority (NCRWA) $900,000 of federal sourced
money for expenses related to a federal water project managed and owned by NCRWA. The assets
acquired/built by NCRWA are the property of NCRWA. The
$900,000 reimbursement is a sub-award of a federal grant from the City to NCRWA. The City did not
monitor NCRWA to ensure the money was audited and spent in accordance with the federal
requirements.
Context:
During the federal portion of the audit, we discovered the Town received two federal
sourced loans totaling $900,000. We further discovered the money was transferred to
another Montana local government to build a water project. Inquiry with the city disclosed
no formal monitoring procedures.
Criteria:
The Town did not monitor the subrecipient (NCRWA) as required by 2CFR 200-part f. Additionally, the
Town did not notify NCRWA of the federal requirements for the grant.
Effect:
The Town was not in compliance with the monitoring requirements of the federal grant. Additionally,
NCRWA was not aware of the federal requirements. As a result, their audit did not include this
federal grant as part of their annual audit. The federal audit opinion will be qualified for this
matter.
Cause:
The Town was not aware of the monitoring requirements.
Recommendation:
We recommend the Town identify all federal money and comply with all federal
compliance requirements.