Finding Text
2024-004—Subrecipients Awards and Monitoring Type of Finding (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards (G) Instance of Noncompliance related to Federal Awards Funding Agency U.S. Department of Agriculture (“USDA”) Program Partnerships for Climate-Smart Commodities; Award: USDA/NR243A750004G005 (AL 10.937); Period: 11/02/2023 -11/01/2028 Questioned Costs None identified Statement of Condition The Subaward agreement needs to be clear of the type of agreement with grant number, Assistance Listing number and clear programing and financial expectations. Pass-through entities are to provide reasonable assurance that the costs of goods and services charged to federal awards are allowable and charged in accordance with the applicable regulations. During our test work over controls over sub-recipient monitoring, we noted Quivira did not have a financial monitoring tool to require the sub-recipients to provide the primary recipient with a copy of their audit report and the sub-recipient's response to any audit findings, when applicable. Note: Quivira did ask for backup documentation for all expenses Invoices and a programmatic report and documented meeting discussions about sub-recipients. The primary recipient should also follow-up on the audit findings to determine whether the sub-recipient has satisfactorily resolved audit findings. This follow-up should be performed on a timely basis. Criteria 2 CFR §200.332 requires Pass-through-Entities to: issue subawards with complete federal award identification; assess subrecipient risk; monitor programmatic and financial performance; and verify audit requirements and review reports/findings; as well as issue follow up corrective actions as applicable. Some of the specific requirements are as follows: Federal award identification including the AL #, subawards amount, type of agreement (subawards versus contract, etc.) Evaluate each subrecipient fraud risk and risk of non-compliance with the federal awards Monitor the financial and performance reports Verify if the sub-recipient is audited, if required and if they have any findings related to the subaward Effect Without complete and accurate monitoring of sub-recipient expenditures of federal funds, Quivira cannot ensure the costs of goods and services charged to federal awards are allowable and charged in accordance with the applicable regulations. When the entity does not receive and review these audit reports, it may not have complete information about weaknesses identified by the independent auditors. Cause Quivira considered the Independent Contractor agreement and the requests for reimbursement of backup documentation sufficient. Recommendation Quivira should ensure it properly monitors sub-recipients according to the requirements required by the CFR 200 identified under “Criteria”. Views of Responsible Officials and Planned Corrective Action Management agrees with the recommendation. Quivira Coalition will: Action Step Detail Date Responsible Party Update its subrecipient and contractor agreement templates to include information outlined in 2 CFR § 200.332, including more specific federal award identification. 10/31/25 Operations Director Add a clause to the subrecipient and contractor agreement templates to include a requirement to report any significant developments to Quivira Coalition. 10/31/25 Operations Director Build a procedure for evaluating a subrecipient’s fraud risk and risk of non-compliance with the federal awards (as outlined in 2 CFR § 200.332 (c)) during the grant application phase or before engaging in agreements & work with subrecipient. It will continue to follow-up annually with the recipients on fraud risk and risk of non-compliance until the end of the federal award period. 10/31/25 Operations Director; CRI Director & Grants Manager Monitor sub-recipients as required by 2 CFR 200.332(e) 1/31/2026 Operations Director If a subrecipient has significant development during the course of monitoring, institute a tailored monitoring plan as outlined in 2 CFR § 200.332 (e) & (f) and resolve any findings listed as its responsibility under 2 CFR § 200.332 (e). 10/31/25 Operations Director; CRI Director & Grants Manager