Finding Text
MW2020-005 SUBRECIPIENT MONITORING (REPEAT FINDING) (PREVIOUSLY REPORTED AS
MW2019-002)
Condition
The auditee failed to comply with federal regulations requiring the monitoring of subrecipients
for federal awards. Recipients of federal awards are responsible for monitoring the activities of
subrecipients to ensure that they comply with applicable laws, regulations, and the terms and
conditions of the federal award. The auditee did not maintain any documentation to demonstrate
that they fulfilled this responsibility. This noncompliance with the monitoring requirement could
result in the mismanagement of federal funds, including the inappropriate expenditure of funds
or the failure to achieve program objectives.
Criteria
The regulations are documented in 31 USC 7502(f)(2), 2 CFR sections 200.330, .331, and
.501(h); (Requirements for Pass-Through Entities). The criteria for monitoring subrecipients of
federal awards should be following federal regulations, the terms of the federal contract, and any
additional requirements specified by the auditee's policies and procedures. Specifically, the
monitoring criteria should include, but not be limited to, the following:
• Subrecipient Risk Assessment
• Financial Monitoring
• Compliance Monitoring
• Reporting and Documentation
Cause
CUAHSI had a policy and procedure manual in place which outlined the steps for monitoring.
The was no audit evidence of anyone following it and monitoring that the subrecipient was using
the funding as prescribed. There was a lack of management oversight.Effect
CUAHSI is not in compliance with the requirements for monitoring and thus creating the
possible misuse or improper use of funds.
Recommendation
The auditor recommends that management review the requirements documented in 31 USC
7502(f)(2), 2 CFR sections 200.330, .331, and .501(h);(Requirements for Pass-Through Entities)
and develops and implements procedures to adhere to such requirements.
Current Year Status
This condition still exists for the year ended December 31, 2020. The monitoring of
subrecipients was not completed in a reasonable timeframe in accordance with the policies set
forth in the UG.
View of Responsible Official and Planned Corrective Action
See accompanying Corrective Action Plan.