Finding Text
Finding: 2024-001 Subrecipient Monitoring
Information on the Federal Program: Assistance Listing Number 16.738
Criteria: CFR § 200.332, "Requirements for pass-through entities", requires pass-through entities to
evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms
and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.
Condition: As part of our audit, we selected a sample of subawards charged to the major Federal
program. We noted that the pre-award risk assessments were not performed until November 2024,
subsequent to the subawards being signed with the subawardees. Based on our discussions with
management, the process for performing pre-award risk assessments for subrecipients and
determining and documenting the appropriate level of ongoing monitoring for subrecipients was
implemented in November 2024.
Cause: The Association did not perform pre-award risk assessments on its subrecipients as required
by Federal regulation.
Effect: The Association could inadvertently engage in relationships with subrecipients of higher risk
without the appropriate level of oversight (i.e. monitoring) to ensure subrecipients are expending
funds in accordance with the provisions and terms of the subaward.
Questioned Costs: None noted.
Context: Our audit procedures in this area consisted of substantive testwork over a sample of
subrecipient expenditures that were selected based on a defined threshold. We consider our sample
to be representative of the populations, and thus, is a statistically valid sample. The issue is deemed
to be systemic.
Identification as a Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Association strictly adhere to its current subaward policy
and ensure the risk assessment procedures over all of its subrecipients are performed and
documented prior to engagement. Based on these risk assessments, the Association should assign a
risk level to each, and then determine the monitoring tools to apply based on these risk levels.