Finding Text
Criteria: The Organization should 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. The Organization should also follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal awards provided to the subrecipient detected through audits/on-site reviews, or other means.
Condition: During the audit, we noted that the Organization did not perform the subrecipient monitoring procedures in a timely manner.
Cause: The Organization did not have the bandwidth to perform the monitoring procedures over subrecipients in a timely manner.
Effect or Potential Effect: During the audit, we noted that the Organization hired a consulting company to perform the subrecipient monitoring procedures to monitor compliance. The results of the monitoring procedures were not communicated to the Organization in a timely manner. While our testing procedures did not uncover any unallowable costs, the potential effects are that the subrecipients could charge unallowable costs to the Grantor without the knowledge of the Organization.
Recommendations: The Organization should implement a policy in which all procedures performed related to subrecipient monitoring are completed in a timely manner and all findings are communicated to the subrecipients.
Views of Responsible Officials and Planned Corrective Action: The Organization will implement procedures to guarantee the proper supervision for subgrantees in a timely manner.