Finding Text
Finding 2024-002: Subrecipient Monitoring
Federal Program: Adv HIV & AIDS Epidemic Control (AHEC) Activity - ALN 98.U01
Criteria: Recipients of federal funding who pass-through federal funds to subrecipients must evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring (2 CFR 200.332 (e)). In monitoring a subrecipient, a pass-through entity must review financial and performance reports (2 CFR 200.332 (e)). A pass-through must consider whether the results of a subrecipient's audit, site visits, or other monitoring necessitate adjustments to the pass-through entity's records. (2 CFR 200.332 (h)).
Condition: Insufficient monitoring was performed over fixed amount subawards.
Cause: Improper controls over subrecipient monitoring compliance requirement.
Effect: Controls in place did not allow for sufficient monitoring over subrecipients.
Questioned costs: None
Context: Fixed amount subawards did not have documented subrecipient monitoring plans based on subrecipient’s risk assessment evaluations. Monitoring of fixed amount subawards was limited to reviewing milestone certification forms against milestone tables included in the subrecipient agreements. Financial audits or reports were not requested for non-U.S. based subrecipients as part of monitoring procedures.
Repeat finding: No
Recommendation: We recommend that management review subrecipient monitoring policies and procedures required over fixed amount subawards to ensure there are documented subrecipient monitoring plans based on the subrecipient’s assessed level of risk and to ensure that financial reports or audits of the subrecipients are requested for non-U.S. based subrecipients.
Views of responsible officials: Management agrees with the finding. See corrective action plan.