Finding Text
Criteria
A pass-through entity must identify the award and applicable requirements to the subrecipient, evaluate each subrecipient’s risk of noncompliance, and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward.
Context
The Organization has not implemented adequate procedures to monitor the activities of its subrecipients. We noted nine 2024 subrecipients and selected four for testing. We noted the following deficiencies in our testing: Specifically, we noted the following deficiencies in our testing:
- For the four subrecipients tested, there was no documented evidence that the Organization confirmed if subrecipients expected to be audited as required by 2 CFR Part 200, Subpart F, and if so, met this requirement.
- For the four subrecipients tested, there was no documented evidence that the Organization verified subrecipients were not suspended, debarred or otherwise excluded from participating.
Cause
The Organization was not aware of these documented requirements surrounding subrecipient monitoring. Additionally, government funding and reporting is searchable in USAspending.gov.
Effect
Failure to adequately monitor subrecipients increases the risk that subawards may not be used for their intended purposes and that noncompliance with federal requirements may go undetected. This could result in questioned costs or unallowable expenses.
Questioned Cost:
None
Recommendation
We recommend that management review its subrecipient monitoring procedures and ensure that all Uniform Guidance requirements are included and documented adherence to the Uniform Guidance requirements is retained in each subrecipient’s folder.
Views of Responsible Officials and Planned Corrective Actions
See Correction Action Plan.