Finding 1056541 (2023-004)

Finding: Subrecipient Monitoring Federal Assistance Listing Number 21.023 COVID-19 Emergency Rental Assistance Program Department of Treasury Award Number - ERAE0226, Award Year 2021 Criteria: According to 2 CFR Part 200.332 - All pass through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and include various required 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. In addition, pass through entities must 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. Finally, the pass through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, is in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Condition: During testing, we noted the following: - The Assistance Listings number and Title were not provided to the County's two subrecipients in accordance with 2 CFR Part 200.332(a) - The County did not have a formal documented risk assessment completed for either of the County's two subrecipients in accordance with 2 CFR Part 200.332(b) - The County did not obtain or review one of the subrecipients single audit reports in accordance with 2 CFR Part 200.332(f) Questioned costs: None. Context: We tested the County's two subrecipients receiving $1,075,000 in subrecipient awards for the year ended December 31, 2023 and noted the issues above. A non-statistical sampling methodology was used to select the sample. Effect: The subrecipient may be unaware whether the funds are federal or what compliance requirements they are responsible for following. In addition, The County may not perform the adequate level of monitoring as formal risk assessments were not completed. Finally, the County did not review the single audit report and while any finding would not directly be related to the subaward program, failure to review such reports and take appropriate action could result in non-compliance by the subrecipient continuing for an inappropriate length of time. Cause: The County does not have adequate internal controls over subrecipient monitoring to ensure that the County is in compliance with subrecipient monitoring requirements. Identification as a repeat finding: Not applicable. Recommendation: We recommend that the County develop a risk assessment template or form to be completed over each federal subrecipient. The County should provide training to those administering grants over the development risk assessment template or form and the associated monitoring to be performed based on each assessed risk. In addition, the County should develop a subrecipient grant template to help ensure all required information is included within each award. Finally, the County should establish a policy or procedure over obtaining and reviewing audits completed over each of their subrecipients. Views of responsible officials: The County agrees with the finding. See separate auditee document for planned corrective actions.