Finding Text
2023-005 - Subrecipient Monitoring - Material Weakness/Noncompliance Federal Program: Assistance Listing #14.228 Community Development Block Grants/State's Program and Non-Entitlement Grants in Hawaii, U.S. Department of Housing and Urban Development, Passed Through Pennsylvania Department of Community and Economic Development and Pennsylvania Emergency Management Agency, Pass-Through Entity Identifying Numbers: C000073444, C000075689, C000082264, C000086078 and PEMA-2022-007 Assistance Listing #21.023, COVID-19 Emergency Rental Assistance Program, U.S. Department of Treasury, Passed Through Pennsylvania Department of Human Services, Pass-Through Entity Identifying Number: not available Prior Year Finding Number: 2022-005 Criteria: The Uniform Guidance outlines various requirements for pass-through entities in Section 200.331, including the following items: (a) ensuring all subawards are clearly identify to the subrecipient as a subaward and include certain required information; (b) evaluate each subrecipient's risk of noncompliance with federal statutes, regulations and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring; (c) consider imposing specific subaward conditions upon a subrecipient, if appropriate; (d) 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; (e) depending on the pass-through entity's assessment of risk posed by the subrecipient, perform appropriate monitoring of the subrecipient; (f) verify that every subrecipient is audited as required by Subpart F of the Uniform Guidance; (g) consider whether the results of the subrecipient's audits, on-site reviews or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records and; (h) consider taking enforcement actions against noncompliance subrecipients as described in Uniform Guidance Section 200.338. Condition/Context: The County does not have a formal risk assessment or oversight program in place to monitor its subrecipients as required under the Uniform Guidance, including ensuring that financial information reconciles between the underlying expenditure reports and the subrecipient/County audit reports. Questioned Costs: N/A Cause: The County has not prepared or adopted the written policies / procedures required by Uniform Guidance and as such, the County personnel overseeing subrecipients did not understand their responsibilities in regards to monitoring subrecipients. Effect: The County cannot be assured that subrecipients are appropriately understanding and complying with the requirements of the funding stream passed through to them. Recommendation: We recommend that the County revisit its policies and procedures related to subrecipient monitoring and ensure that there are formal subaward agreements with all subrecipients, prepare a formal, initial, risk assessment of each potential subrecipient and document its monitoring activities of each subrecipient. Views of Responsible Officials and Planned Corrective Actions: Management understands and is working to implement these policies, procedures and activities on a prospective basis.