Finding Text
2025-004: Subrecipient Monitoring (Continued) Condition and context: In relation to Continuum of Care Program (AL # 14.267), the Alliance did not complete the required monitoring responsibilities, specifically: 1. Ensuring that every subaward is clearly identified to the subrecipient as a subaward, which is required to include Federal award identification, requirements of the subaward, any additional requirements imposed, indirect cost rate detail, a requirement that subrecipient permit the pass-through entity and auditors to access the subrecipient’s records and financial statements for the pass-through entity to fulfill its monitoring requirements and appropriate terms and conditions concerning the closeout of the subaward. There were no subaward contracts for the period October 1, 2023 to September 30, 2024. Subaward contracts for the period October 1, 2024 to September 30, 2025 did not include all required items. 2. Monitoring the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward including: Reviewing financial and performance reports, ensuring that the subrecipient takes corrective action on all significant developments that negatively affect the subaward, issuing a management decision for audit findings pertaining only to the Federal award, and resolving audit findings specifically related to the subaward. The subrecipient received a significant deficiency and compliance finding in their June 30, 2024 single audit noting that there was no rent calculation worksheet present for one of the individuals tested to indicate income in order to ensure program income portions are being appropriately calculated. The Alliance did not obtain the single audit report, nor resolve the finding specifically related to the subaward. As such, there were limited indications that the Alliance monitored the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. 3. Verifying that a subrecipient is audited as required by CFR, which the Alliance did not verify. Cause: The cause is due to limited internal controls related to subrecipient monitoring Effect or potential effect: Without adequate controls over this process, the subrecipient may not be complying with Federal statutes, regulations, and the terms and conditions of the subaward. Questioned costs: None. Identification as a repeat finding, if applicable: Not applicable Recommendation: The Alliance must assign individuals who are experienced and knowledgeable in the compliance requirements of the Uniform Guidance to monitor all subawards to ensure that the Alliance has met the applicable compliance and reporting requirements of each federal award. Views of responsible officials: Refer to the Corrective Action Plan prepared by the Alliance in regard to this matter.