Finding Text
Finding Number: 2025-004 Finding Type: Federal award finding Federal Assistance Listing No.: 15.685 Program Name: National Fish Passage Federal Agency: U.S. Department of the Interior Pass-Through Entity: n/a Grant Number: F24AC01768-00 Award Project Period: July 1, 2024 through July 1, 2029 Control Deficiency Type: Significant deficiency Instance of Noncompliance: Yes Compliance Requirement: Subrecipient monitoring Repeat Finding: No Criteria: Under 2 CFR 200.332 a pass-through entity must: • Evaluate each subrecipient’s risk of compliance to determine appropriate monitoring • Conduct monitoring activities based on risk, which may include reviewing financial and programmatic reports, following up on deficiencies, and verifying that subrecipients have required audits • Verify that subrecipients are not suspended or debarred prior to issuing a subaward • Ensure subrecipients submit required reports timely and comply with federal requirements • Include all applicable requirements imposed, including audit requirements under 2 CFR 200 Subpart F, the subaward • Issue management decisions for audit findings within 6 months of receiving the audit report Condition: The Council did not fully implement the required subrecipient monitoring procedures for its federal subaward. Specifically: • A formal written risk assessment was not performed prior to issuing the subaward. The Council relied on its prior working relationship with and knowledge of the subrecipient on non-federally funded projects rather than evaluating federal compliance risk. • Procurement and suspension/debarment verification were performed after the start of the subaward date. • Monitoring procedures performed were not thoroughly documented • The subaward did not include certain necessary language related the audit requirements under 2 CFR 200, Subpart F Cause: This is the Council’s first experience with awarding federal funds to a subrecipient. Staff relied on familiarity with the subrecipient rather than formalizing and documenting the required federal oversight steps. Effect: Without a documented risk assessment, timely debarment verification, documented monitoring activities, and required subaward language, the Council cannot fully demonstrate that it mitigated the risk of subrecipient noncompliance. This increases the likelihood that federal requirements may not be met or that noncompliance may go undetected. Questioned Costs: None. Audit Recommendation: The Council should strengthen its subrecipient monitoring processes by: • Developing and implementing a formal risk assessment process for all subrecipients of federal funds. • Performing and documenting suspension/debarment checks prior to issuing any subaward. • Reviewing its subaward requirements to ascertain that they include all the applicable requirements • Establishing monitoring procedures that include: • Tracking and reviewing required financial and programmatic reports for timeliness and completeness. • Obtaining and reviewing the subrecipient’s Single Audit or alternative audit documentation. • Issuing management decisions on findings within 6 months • Documenting follow up on any identified issue Management’s Response: Rogue River Watershed Council’s sub-recipient award in 2025 represents our first (and only) such award to date. While we don’t expect any sub-recipient awards in the near future, we will develop a set of procedures guiding such awards including the steps and the required timing for conducting a risk assessment, suspension/ debarment verification, required monitoring procedures, and the required language under 2 CFR 200, Subpart F. These procedures will be contained within a stand-alone policy for sub-recipient awards.