Finding 1115827 (2024-004)

Criteria or specific requirement: Compliance: 2 CFR §200.332(a) - Requirements for Pass-Through Entities states, in part, that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The City did not furnish all required information to subrecipients at the time the subawards were issued. Context: The City failed to obtain the required Unique Entity Identifier (UEI) from one out of five subrecipients tested and the Federal Award Identification Number (FAIN) from five out of five subrecipients tested in accordance with proper subrecipient monitoring procedures. Questioned costs: None. Cause: The City did not establish effective internal controls and procedures over subrecipient monitoring.Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about program-specific regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in subrecipients’ Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance.Recommendation: The City should review and enhance its internal controls and procedures to ensure that all required information is included in subawards at the time of issuance and maintained in subsequent modifications. Views of responsible officials: The City agrees with this finding. See separate Corrective Action Plan related to this finding.