Finding 1151777 (2023-002)

Finding 2023-002 Material weakness in internal controls over compliance and instances of noncompliance related to subrecipient monitoring. Federal Agency: Department of Treasury Program Title: Coronavirus State and Local Fiscal Recovery Fund Assistance Listing Number: 21.027 Award Numbers: SLFRP0194 Project Period: November 1, 2021 - April 30, 2023 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart D requires a pass-through entity to adopt compliance policies to ensure sub-recipients comply with requirements under the award, and evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of such agreements for the purposes of determining appropriate subrecipient monitoring. Condition/Context for Evaluation During the audit for the year ending June 30, 2023, the Agency did not have a subrecipient monitoring policy and did not conduct monitoring over the one subrecipient that was awarded under the program. Questioned Costs Not applicable. Cause The Agency’s subrecipient monitoring policy did not include all the required provisions outlined in 2 CFR 200.332. Effect or Potential Effect The Organization did not fully comply with the requirements regarding subrecipient monitoring. Repeat Finding Not Applicable. Recommendation We recommend that the Agency update the subrecipient monitoring policy to ensure a risk assessment is performed over all subrecipients. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying management corrective action.