Finding Text
Finding 2024-003: Subrecipient Management and Monitoring (Material Weakness)
Information on the Federal Programs: Assistance Listing Number 98.001
Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must 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 procedures to
prescribe to each individual subrecipient. Additionally, per 2 CFR 200.332(a), pass-through entities
must include specific information in subrecipient agreements, such as the Assistance Listing Number
(ALN), compliance requirements, and monitoring responsibilities, to ensure proper oversight and
accountability.
Condition: Astraea has a subaward policy, which requires a risk assessment form be completed for
each potential subrecipient. However, this step was not completed for all of the subrecipients in which
Astraea engaged with during the fiscal year.
Furthermore, during our review of subrecipient agreements, we noted that certain agreements did not
contain all the required elements as outlined in 2 CFR 200.332(a).
Cause: Astraea did not adhere to its policy in regards to risk assessment procedures. Additionally,
Astraea did not have formalized procedures for ensuring all required elements, including the ALN,
were included in subrecipient agreements.
Context: Astraea failed to perform risk assessment procedures. Our audit work 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. Additionally, during our
review of subrecipient agreements we noted two that did not include the required ALN, which is
necessary to properly identify the source of Federal funding.
Effect: Astraea 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. Additionally, the absence of required
information in subrecipient agreements increases the risk of noncompliance with Federal grant
requirements and improper use of Federal funds.Questioned Costs: None noted.
Identification as a Repeat Finding, if Applicable: Finding 2023-004
Recommendation: We recommend Astraea 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, Astraea should assign a risk level to each, and then
determine the monitoring tools to apply based on these risk levels. We also recommend Astraea
require its subrecipients to submit financial reports demonstrating use of each advance before
advancing more funds, to ensure subrecipients are expending funds appropriately. Furthermore,
Astraea should implement enhanced review procedures to ensure all subrecipient agreements
include the required information before execution, such as, updating standard agreement templates.