Finding Text
Condition: We tested 100% of the twenty-nine (29) subrecipients and noted the following:
• The County failed to adequately monitor twenty-eight (28) of the subrecipients.
• The contracts did not clearly identify the vendor as a subrecipient relationship.
• Funds were not encumbered at the time of the notice to proceed was given to subrecipients.
The subrecipients approved by the BOCC state that subrecipients or beneficiaries shall provide monthly performance reports until all award funds hereunder have been expended. Through the observation of records, it was determined that monthly performance reports were not submitted each month by entities receiving funding.
Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are made in accordance with compliance requirements.
Effect of Condition: This condition resulted in noncompliance with federal grant guidelines.
Recommendation: OSAI recommends the County gain an understanding of the requirements for this program and implement internal controls to ensure compliance with these requirements.
Management Response:
Board of County Commissioners: The Board of County Commissioners is responsible for the overall fiscal concerns of the county. See OKLA. STAT. Title 19, § 345. The Board of County Commissioners, with the cooperation and participation of all elected officials, reviews, develops and implements policies and procedures to create a strong internal control environment. The Board of County Commissioners will work with all elected officials, the third-party administrator, and federal, state and local partners to develop policies, procedures, and internal controls designed to accurately track grants, including the application process, verification, oversight, and reporting of grant requirements. These policies and procedures will be designed to identify requirements for recipients and sub-recipients of grants, ensure accurate equipment and real property management, procurement, recipient and subrecipient monitoring and reporting. Further, policies will ensure a proper understanding of all grant requirements and compliance of the same. To assist in this process, the Board of County Commissioners engaged a third-party administrator to oversee the grant process, including application, eligibility, review, requirements, contracting, recipient tracking and oversight, and documentation and reporting. The Board of County Commissioners will work with the third-party administrator to ensure proper grant administration.
Criteria: 2 CFR 200 §200.332 Requirement for Pass-Through Entities states in part:
All pass-through entities must:
(a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following 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.
(2) All requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations and the terms and conditions of the federal award.
(5) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient’s records and financial statements as necessary for the pass-through entity to meet the requirements of this part.
(6) Appropriate terms and conditions concerning closeout of the subaward.