Finding Text
Finding 2023-002: Department of Health and Human Services – Research & Development Cluster – ALN #93.394, #93.395, and #93.399 – Subrecipient Monitoring
Criteria: 2 CFR section 200.332 requires pass-through entities to evaluate each subrecipient’s risk of noncompliance, monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes and is in compliance with federal statutes, regulations, and the terms and conditions of the subaward, and verify that every subrecipient is audited as required by Subpart F, as necessary.
Statement of Condition: No formal documentation existed to indicate that the Foundation performed the required monitoring of its subrecipient’s activity and no written policy exists to establish procedures to document the monitoring of the subrecipient.
Cause: The Foundation does not have employees and is operated by a volunteer Board of Directors. Additionally, no formal policies were written to establish procedures to document monitoring of subrecipients.
Effect: A failure to monitor a subrecipient's compliance with relevant federal requirements could result in noncompliance with the terms and conditions of the subawards. Subrecipient monitoring was ineffective.
Questioned Costs: None.
Identification as a Repeat Finding: Not a repeat finding.
Recommendation: We recommend that the Foundation establish written policies to document the monitoring of its subrecipient by an individual independent of the subrecipient. This policy should address all required elements of 2 CFR 200.332.
Views of Responsible Officials: Management agrees with finding; see separate corrective action plan.