Finding Text
FINDING NO: 2022-002 - Subrecipient Monitoring (Repeated from Prior Year Findings 21-003, 20-004, 19-005, 18-004, and 17-003)
Federal Program: McKinney Education for Homeless Children
Project No: 21-4920-00 and 22-4920-00
Federal Assistance
Listing No: 84.196A
Passed Through: Illinois State Board of Education
Federal Agency: U.S. Department of Education
AND
Federal Program: COVID-19 ARP - McKinney Education for Homeless Children
Project No: 22-4998-HM
Federal Assistance
Listing No: 84.425W
Passed Through: Illinois State Board of Education
Federal Agency: U.S. Department of Education
Criteria/Specific Requirement:
A. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance) require the Regional Office to ensure any subrecipient monitoring using federal funds be
consistent with the standards set forth in the Uniform Guidance at 2 CFR 200.332.
B. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance) section 200.303 Internal Controls states the following: “The 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.”
Condition:
Audit procedures revealed that ROE #47 was not properly monitoring subrecipients in accordance with the Uniform Guidance standards as follows:
McKinney Education for Homeless Children – for three (3) of three (3) subrecipients tested, ROE #47:
• Did not evaluate the risk of noncompliance with Federal statutes, regulations, and the terms and conditions of
the subaward.
• Did not determine whether the subrecipient met the 2 CFR 200 Subpart F Audit requirements criteria for a
single audit.
COVID-19 ARP - McKinney Education for Homeless Children – for two (2) of two (2) subrecipients tested, ROE #47:
• Did not identify the subaward and applicable requirements in the agreements.
• Did not evaluate the risk of noncompliance with Federal statutes, regulations, and the terms and conditions of
the subaward.
• Did not conduct subrecipient monitoring procedures.
• Did not determine whether the subrecipient met the 2 CFR 200 Subpart F Audit requirements criteria for a
single audit.
Questioned Costs:
None
Context:
The Regional Office of Education #47 expended a total of $990,919 of federal awards in fiscal year 2022, of which $274,520 in McKinney Education for Homeless Children and $61,075 in COVID-19 ARP - McKinney Education for Homeless Children were passed-through to subrecipients.
Effect:
The Regional Office of Education #47 is not in compliance with Title 2 of the Code of Federal Regulations (CFR) Part 200.332 as it relates to subrecipient monitoring requirements. Additionally, the effect of noncompliance can result in questioned costs.
Cause:
Regional Office management had not been asked to distribute Federal ARP funds before. All the funds were distributed to public school districts that are subject to state audits every year themselves and we mistakenly did not follow up to get the results of their audits.
Recommendation:
We recommend that the Regional Office of Education #47 establish and maintain effective internal control over federal awards to ensure subrecipients are properly monitored as required by 2 CFR 200.332. This includes:
a. Identifying the subaward and applicable requirements in the agreements;
b. Evaluating the risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the
subaward;
c. Conducting subrecipient monitoring procedures; and
d. Determining whether the subrecipient met the requirement criteria of 2 CFR 200 Subpart F Audit requirements
for a single audit.
Management’s Response:
Effective April 2024, the Regional Office will formally identify the subaward and the applicable requirements in our agreements. We will conduct subrecipient monitoring procedures. We will determine if the subrecipient met the requirement criteria of 2 CFR 200 Subpart F Audit requirements for a single audit.