Finding Text
FINDING 2024-002 Subrecipient (Noncompliance, Significant Deficiency) Federal Program Information: Education Stabilization Fund (ALN 84.425U) Criteria: Per 2 CFR § 200.332, pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes specific information at the time of issuance and upon modification. Required elements include federal award identification; all requirements of the subaward including the federal statutes, regulations and terms and conditions; indirect cost rate; access to records; and closeout terms and conditions. Condition: The Organization awarded 39 awards to subrecipients and did not include the information required by 2 CFR § 200.332 in the subaward agreement. Cause: The Organization did not have a standardized process or checklist to ensure all required subaward elements were included in the agreement. Effect or Potential Effect: Failure to communicate the federal nature of the award may result in subrecipients not being aware of their responsibilities under federal regulations, which could lead to noncompliance and misuse of federal funds. The Organization was not in compliance with the subrecipient requirements outlined in the agreement and in 2CFR200.332. Prior Year Finding: Reported as 2023-002 in the prior year. Recommendation: We recommend that the Organization update subaward agreements to include all federal provisions required to be communicated by the grant and also 2 CFR § 200.332. Views of Responsible Officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.