Finding Text
Finding 2024-007 U.S. Department of Health and Human Services Assistance Listing Number 93.137 – Community Programs to Improve Minority Health Grant Program Material Weakness and Noncompliance over Subrecipient Monitoring Repeat Finding: Yes, 2023-007, 2023-008, 2023-009 Criteria: A pass-through entity (PTE) must clearly identify to the subrecipient the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). A PTE must also evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)),and 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 (2 CFR sections 200.332(d) through (f)). Condition and Context: For 1 out of 1 selection, the City was not able to provide support showing evidence of the risk assessment performed prior to granting funds to the subrecipient and of the monitoring of the subrecipient during the year. Additionally, various information related to the funding source and the grant were missing on the memorandum of understanding (assistance listing number, federal department grantor, single audit requirements, etc.) Cause: The program has had significant employee turnover and there was a lack of documentation of these policies and procedures. Program management does not have knowledge of the process used to select subrecipients. Monitoring procedures performed were not documented and reports submitted by the subrecipients were not reviewed. Effect or Potential Effect: Failure to explicitly state federally-imposed requirements and regulations may result in noncompliance by the subrecipient. Selecting subrecipients without a formal evaluation process and performing minimal monitoring procedures increases the risk of noncompliance for the City and could lead to a loss of funding if the subrecipients are deemed noncompliant. Questioned Costs: Unknown. Recommendation: Program management should revise subaward agreements to specifically note the requirements and regulations of the Uniform Guidance, as noted in Section 200.331(a). Additionally, program management should develop standardized procedures for selecting and granting subawards. These procedures should be formalized and maintained for future reference. Brief minutes of progress meetings should be taken to show that monitoring is taking place. All reporting by the subrecipient should be reviewed by management of the program. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.