Finding Text
2024-002 - Subrecipient Monitoring
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Subrecipient Monitoring).
Federal program(s)
U.S. Department of Treasury -
COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) (ALN 21.027); Passed through Michigan Strategic Fund; Award Number 398728.
Criteria. A pass-through entity must monitor the activities of the subrecipients 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 (2 CFR 200.331(d)-(f)), plus any additional items identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award.
Condition. We noted that the Organization did not compile any risk assessments or perform adequate subrecipient monitoring during the fiscal year.
Cause. The cause of this condition appears to be a lack of understanding of the subrecipient monitoring requirements of the grants.
Effect. The lack of monitoring failed to provide reasonable assurance that the subrecipients complied with the provisions of the grant.
Questioned Costs. No costs were questioned due to the fact that the Organization approved subrecipient expenditures.
Recommendation. We recommend that the Organization create a subrecipient policy to ensure that all subrecipient grant awards are monitored in compliance with the Uniform Guidance requirements.
View of Responsible Officials. Management is in agreement and has prepared a Corrective Action Plan.