Finding Text
Criteria: Federal requirements for the 20.205 Highway Planning and Construction awards include subrecipient monitoring for the award. Condition: The County was not in compliance with the requirements: - Obtain an understanding of internal control, assess risk, and test internal controls. - Identify the requirements of the pass thru money and convey the terms and conditions to the subrecipient. - Monitor the subrecipient to verify that the award was spent in accordance with the terms and conditions set forth by the award. Context: The Highway Department passed $728,000 from the federal government through to the City of Red Lake Falls for the trail project. Various documentation was required to comply with the subrecipient monitoring portion of the award. Effect: Noncompliance with federal award requirements. Cause: The monitoring of pass-thru awards was missing in the documentation of the subrecipient project. Recommendation: We recommend the County abide by their policy for subrecipient monitoring. County’s Response: The County acknowledges the finding and will take corrective action to ensure compliance with federal subrecipient monitoring requirements. The County will review its procedures to ensure that all future subrecipient agreements include proper documentation of monitoring activities, including communication of award terms, risk assessments, and verification that funds are expended in accordance with federal requirements. The County Highway Department and Auditor’s Office will work together to document all subrecipient monitoring steps for future federally funded projects.