Finding Text
Criteria or specific requirement: The Code of Federal Regulations,2 CFR 200.332(c) states that the pass through entity must "evaluate each subrecipients fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring." The CFR then states in paragraph (e) that the entity must also "monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and terms and conditions of the subaward. In addition, the Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements.
Condition: The College did not have proper monitoring procedures in place to evaluate subrecipients fraud risk and risk of noncompliance and also did not have proper procedures in place to monitor that the subrecipient complied with federal statutes, and regulations.
Questioned costs: None
Context: During our testing of the one subrecipient in this program. We noted the College did not have policies and procedures to monitor subrecipients fraud risk, risk of noncompliance, and compliance with federal statutes and regulations. There was also no control in place to ensure compliance with subrecipient monitoring requirements.
Cause: The College did not have proper monitoring procedures or controls in place to ensure compliance with subrecipient monitoring requirements.
Effect: Subrecipients could be noncompliant with federal statutes and the College would be unaware.
Repeat Finding: No
Recommendation: We recommend the College implement policies and procedures along with an observable control to ensure that subrecipient monitoring requirements are being met.
Views of responsible officials: There is no disagreement with the audit finding.