Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, 10.443 and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 A0242501X443G026 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Direct Award Periods: August 1, 2022 through July 31, 2027, September 1, 2023 through February 28, 2025, September 29, 2022 through September 30, 2027, September 27 2024 through September 26, 2027 and September 27, 2022 through June 30, 2026 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota-March 1, 2022 through February 28, 2025, April 1, 2023 through March 31, 2025, and September 1, 2020 through August 31, 2025; Board of Regents of the University of Wisconsin System-January 1, 2022 through December 31, 2026 and September 1, 2018 through August 31, 2024. Criteria or Specific Requirement: 2 CFR section 200.332 state pass-through entities are responsible for ensuring proper oversight of subrecipients to ensure compliance with federal requirements. Specifically: § 200.332(a) requires subaward agreements to include specific information such as the Federal award identification, CFDA/Assistance Listing number, subaward period of performance, indirect cost rate, and applicable terms and conditions. § 200.332(f) requires pass-through entities to verify that subrecipients that expend $750,000 or more in federal awards during their fiscal year have met audit requirements under 2 CFR part 200, subpart F. § 200.332(d)(3) requires pass-through entities to review subrecipient audit reports, identify findings related to their federal awards, and ensure corrective actions are taken, including issuing management decisions if needed. Condition: During our audit of subrecipient monitoring controls, we noted the following deficiencies: One out of four subrecipients sampled, the Organization did have documentation that verified a single audit was not required. In another instance of the four sampled, only the financial statement audit was obtained. It indicated there were separate reports for yellow book and single audit. There were no documented procedures or evidence showing that the Organization assessed whether subrecipient audit findings were relevant to its own federal awards, nor that any follow-up or management decisions were issued. Subaward agreements reviewed were missing several elements required by 2 CFR § 200.332(a), including the Assistance Listing number (formerly CFDA), that the award is for research and development, and closeout terms required by the Uniform Guidance. Cause: The Organization has not implemented adequate internal controls, policies, and procedures to ensure compliance with all subrecipient monitoring and subaward agreement requirements under Uniform Guidance. Effect or Potential Effect: These deficiencies increase the risk of noncompliance with federal program requirements, including the potential for unallowable costs, failure to identify material findings affecting the federal program, and weakened enforcement of subrecipient accountability. Additionally, noncompliant subaward agreements may result in ambiguity or disputes related to federal requirements, allowable costs, and required reporting. Repeat Finding: This is a repeat of Findings 2023-002 and 2023-006. Recommendation: We recommend that the Organization: Establish and document a formal process to verify whether each subrecipient is subject to the Uniform Guidance single audit requirement and obtain the applicable reports annually. Implement procedures to review subrecipient audit findings and determine whether they pertain to the Organization’s federal award(s), and issue management decisions when necessary. Develop a standardized subaward agreement template that incorporates all required elements outlined in 2 CFR § 200.332(a), and ensure staff are trained in its use. Periodically review subrecipient files to verify compliance with monitoring and documentation requirements. Views of Responsible Officials: Management agrees with the finding and will implement subrecipient monitoring procedures.