Finding Text
Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds
Federal Catalog Number: 21.027
Federal Agency: U.S. Department of Treasury
Category of Finding: Subrecipient Monitoring
Criteria: Pursuant to the Office of Management and Budget (OMB) 2 CFR Part 200, Appendix XI,
Compliance Supplement May 2023, sections 3-M-1 and 3-M-2:
"A pass-through entity (PTE) must:
Monitor - Monitor the activites 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 (2 CFR sections 200.332(d) through (f)). In addition to procedures
identified as necessary based upon the evaluation of subrecipient risk or specifically required by
the terms and conditions of the award, subaward monitoring must include the following:
1. Reviewing financial and programmatic (performance and special reports) required by the PTE.
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 PTE
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 PTE as required by 2 CFR section 200.521.
Condition: The City does not have a current written policy for subrecipient monitoring conforming to
applicable Federal statutes per 2 CFR part 200, Appendix XI, Compliance Supplement May 2023,
sections 3-M-1 and 3-M2. 1 of 3 invoices selected for testing did not have department head review and
approval to ensure that subrecipient reimbursement request comply with the CSLFRF allowable costs.
Cause: Lack of formal policies and procedures over federal requirement for subrecipient monitoring.
Effect or Potential Effect: City may be sending funds to subrecipients for activities and services that are
nonconforming to allowed costs under the Uniform Guidance.
Questioned Cost: None
Context: During the audit, we found one instance of subrecipient reimbursement that lacked evidence of
review and approval.
Statistical Sampling Validity: Non-statistical sampling was performed in relation to this finding.
Repeat of a Prior-Year Finding: No
Recommendation: We recommend the City establish an official written policy for subrecipient monitoring
that is in line with the requirements of the Uniform Guidance. The policy should contain components for
compliance with and references to Federal requirements, such as review of reports requested from the
subrecipient regarding project status, reviewing invoices to ensure spending is limited to expenses
involving approved projects, and proper approval procedures key personnel perform to ensure these
invoices are valid.
Management Response and Corrective Action Plan
City's Response: The City concurs with the finding.
Corrective Action Plan: The City will establish an official written policy for subrecipient monitoring
that is in line with the requirements of the Uniform Guidance.
Planned Implementation Date: December 2024
Responsible Person: Finance & Community Development Departments