Finding Text
Federal Program – American Rescue Plan Technical Assistance Investment Program – Assistance Listing No. 10.234 – Award No. 2023-70504-40441 – Program Year 2024 – U.S. Department of Agriculture Criteria or specific requirement – Subrecipient Monitoring, 2 CFR 200.332(b), (c) and (e) Condition – The pass-through entity is responsible for identifying the award and applicable requirements to the subrecipient at the time of the subaward providing information described in 2 CFR section 200.332 to ensure the subrecipient uses the federal award in accordance with federal statues, regulations, and the terms and conditions of the award. The pass-through entity is responsible for evaluating each subrecipient’s risk of noncompliance for purposes of determining appropriate subrecipient monitoring. The pass-through entity is responsible for monitoring the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Cause – While the organization did perform certain monitoring procedures, the organization did not have sufficient controls in place to ensure agreements with subrecipients were in compliance with requirements as well as to ensure appropriate monitoring of the subrecipients’ use of funding in accordance with 2 CFR section 200.332. Effect – The organization failed to have agreements with subrecipients that were inclusive of all applicable requirements outlined within 2 CFR section 200.332. The organization did not have sufficient procedures to appropriately monitor the subrecipients’ use of funds within the reporting period. Questioned costs – N/A Context – Out of a population of 8 subrecipients, 2 subrecipients were selected for testing. For the 2 subrecipients, the agreement with the subrecipient was missing information that is required to be communicated with the subrecipient to ensure compliance with federal requirements. Additionally, for the 2 subrecipients, audit reports were not obtained by the pass-through entity during the reporting period to ensure proper use of funding received and proper monitoring of the subaward. Our sample was not and was not intended to be statistically valid. Identification as a repeat finding, if applicable – N/A Recommendation – The organization should ensure agreements with subrecipients include all information required to be communicated to the subrecipient for the subaward. The organization should put controls in place to ensure that monitoring activities are tailored to this risk of each subrecipient and appropriately followed in alignment with what is required. Views of Responsible Officials and Planned Corrective Actions – Management agrees with finding. Management plans to develop a subrecipient monitoring policy aligned with 2 CFR 200.331-333. Management will also standardize agreement templates to include all required clauses for federal award subrecipient agreements, implement a subrecipient risk assessment tool to determine monitoring frequency and risk level identification, and assign staff for annual subrecipient desk reviews or site visits based on risk levels.