Finding 1157583 (2024-002)

Subrecipient Monitoring U.S. Department of Health and Human Services Substance Abuse Prevention – ALN #93.243 Criterion: Per CFR 200.331 the grantee must monitor 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. Per CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The County passed through funding to three subrecipients totaling $4,324,361. During 2024, management did not properly monitor the subrecipients. Specifically, for one of the three subrecipients management was unable to provide any documented evidence of a monitoring being performed although the contract periods are ongoing for the subrecipient; and all three subrecipient files did not contain risk assessment evaluations. Cause and Effect: Management lacks a process to ensure that the evaluation of each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. Therefore, subrecipients were not properly monitored in accordance with 2 CFR 200.331 nor in accordance with the County’s Subrecipient Monitoring Policy. Questioned Cost: None Recommendation: We recommend that management enhance the design of its control activities to ensure that subrecipient files are adequately maintained, and risk assessment evaluations are performed on all subrecipients to ensure they are effectively monitored during the contract period. View of Responsible Officials: The Fulton County Department of Behavioral Health and Developmental Disabilities (DBHDD) concurs with the finding. DBHDD currently performs continuous monitoring activities with program subrecipients by conducting weekly meetings, reviewing monthly reports, invoices, and conducts quarterly performance reviews. DBHDD will strengthen its subrecipient monitoring internal controls by properly documenting these reviews in order to be incompliance with 2 CFR 200.331 and the County’s Subrecipient Monitoring Policy.