Finding Text
2024-001 – Subrecipient Monitoring
Federal Program: Refugee and Entrant Assistance Program
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing Number: 93.566
Repeat of Prior Finding: Yes, initial finding during fiscal year 2023. Finding 2023-006.
Type of Finding: Noncompliance and Material Weakness in Internal Controls Over Compliance
Criteria
According to 2 CFR §200.331, a pass-through entity must adhere to the provisions in 2 CFR §200.332 which require passthrough entities to perform certain subrecipient monitoring procedures. These procedures include providing the subrecipient necessary award information so that the federal award is used in accordance with federal regulations, evaluating risks of noncompliance of subrecipients, implementing monitoring procedures based upon identified risks, and, if applicable, obtaining a copy of the subrecipients’ annual audit, and taking appropriate action on deficiencies detected through the audits, as well as other requirements. Additionally, the nonfederal entity must establish and maintain effective internal controls over the federal award to provide reasonable assurance that the non-federal entity is managing the award in compliance with federal regulations. Further, according to 2 CFR §200.331(a), specific information must be explicitly included in agreements with subrecipients that includes but is not limited to providing the Assistance Listing number, whether funding is COVID related, and that the subrecipient is responsible for compliance with 2 CFR §200 including Subpart F, if applicable.
Condition and Context
The Organization did not have procedures and adequate internal controls in place during the fiscal year to ensure the terms and conditions of the subaward required by 2 CFR §200.332 were provided to the subrecipient in a timely manner prior to disbursing the federal funds.
Cause
The Organization lacked a formal process during the fiscal year for providing subaward agreements or written notifications to subrecipients regarding federal award terms and conditions in accordance with applicable regulations prior to awarding the subaward.
Effect or Potential Effect
Without providing the subrecipient with details on the subaward as required at the time the subaward is made, subrecipients may be unaware that their award is subject to federal compliance requirements.
Questioned Costs
None noted.
Recommendations
We recommend developing and implementing formal procedures to ensure all subrecipients are provided with a written subaward agreement or equivalent documentation stating the required award details at the time of the subaward.
Views of Responsible Officials and Planned Corrective Actions
Management agrees with the finding and recommendations. See the attached corrective action plan.