Finding 1055965 (2022-004)

Finding 2022-004 – Subrecipient Monitoring U.S. Department of Homeland Security Montana Department of Disaster and Emergency Services BRIC: Building Resilient Infrastructure and Communities – ALN 97.047 Subrecipient Monitoring Condition: There is no internal control system to perform subrecipient monitoring. The County has one subrecipient under this award and the total subaward is $832,156. The County did not comply with the subrecipient monitor requirements including: identify the award and applicable requirements to the subrecipient, evaluate the subrecipient’s risk of noncompliance for purpose of determining the appropriate subrecipient monitoring, and monitor the subrecipient. Criteria: In accordance with 2 CFR 200.332,a pass-through entity (PTE) must: 1) clearly identify to the subrecipient the award and applicable requirements, 2) evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward, and 3) monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. In addition to procedures identified as necessary based upon the evaluation of the subrecipient risk or subrecipient monitoring, activities must include: a) reviewing financial and programmatic reports required by the PTE, b) following-up and ensuring the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal awards provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means and c) issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE. Cause: The County does not have formal policies in place for subrecipient monitoring. Effect: A failure to perform subrecipient monitoring could result in noncompliance with federal statutes, regulations, and the terms and conditions of the subaward, as well as adjustments to the County’s own records. Questioned Costs: Unknown Identification as a Repeat Finding: This is not a repeat finding from the prior audit. Recommendation: The County should adopt formal policies and procedures for subrecipient monitoring in accordance with the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See separate corrective action plan.