Finding 1148616 (2024-004)

Criteria: In accordance with 2 CFR §200.332(f), a pass-through entity must 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. This includes verifying that subrecipients expending $750,000 or more in federal awards during the subrecipient’s fiscal year have met the audit requirements of 2 CFR Part 200, Subpart F—Audit Requirements. Condition: During our audit of the County’s administration of federal funds under the CSLFRF program, we noted that the County did not have a documented process in place to track and maintain copies of all Single Audit reports for subrecipients to whom it awarded federal funds. Specifically, the County was unable to provide evidence that it had verified with the pass-through entities that have received federal funds below $750,000 whether they were subject to a single audit, the County only followed the verification process for pass-through entities that received federal award in excess of $750,000. Cause: The County did not establish or implement formal procedures to track subrecipient audit status or to obtain and review Single Audit reports. Effect: Without a process to obtain and review Single Audit reports, the County cannot ensure that subrecipients are complying with federal requirements, which increases the risk of undetected noncompliance or misuse of federal funds. Recommendation:. We recommend that the County develop and implement formal procedures to identify subrecipients subject to the Single Audit requirements, obtain and review their audit reports annually, and follow up on any audit findings that may impact the County’s federal programs.