Finding Text
Finding 2022-001 ? Subrecipient Monitoring Identification of the federal program U.S. Department of Defense U.S. Department of Health and Human Services Research and Development Cluster Assistance Listing Nos. 12.420, 93.242 Federal Award Numbers: Grant Period 1R01MH130193-01 4/5/2022-2/28/2027 W81XWH1910496 5/1/2020-10/31/2023 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must ?(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? According to Texas Biomed?s ?Subcontracts (Post Award)? procedures, ?A Subaward Risk Assessment form will be completed prior to issuing any new initial subaward agreements. 1. A ?Subaward Risk Assessment: Initial? form for new subawards. 2. Completion of the ?Subrecipient Monitoring Questionnaire form? for continuing subawards.? Condition While risk assessment procedures were performed by Texas Biomed for selected subrecipients, for 2 of 5 of the selected subrecipients, Texas Biomed did not perform the risk assessment procedures in accordance with Texas Biomed?s documented procedures and internal controls. Cause Texas Biomed did not adhere to its documented subrecipient procedures and internal controls. Effect or potential effect If Texas Biomed does not adhere to its documented subrecipient procedures and internal controls, Texas Biomed may not appropriately perform its ongoing monitoring of subrecipients based on risk assessment procedures. Questioned costs None. Context For one subrecipient, Texas Biomed did not perform the subaward risk assessment prior to issuing a new subaward agreement with a subrecipient. Texas Biomed did perform the risk assessment two weeks after the subaward was issued. For another subrecipient, Texas Biomed did not obtain a subrecipient monitoring questionnaire during the year. Texas Biomed?s subrecipient expenditures totaled $2.0 million during the period, which represented 5.2% of Texas Biomed?s total research and development cluster expenditures of $38.1 million. Identification as a repeat finding, if applicable This is not a repeat finding. Recommendation We recommend Texas Biomed perform risk assessment procedures for subrecipients in accordance with Texas Biomed?s documented procedures and internal controls. Views of responsible officials Texas Biomed will revise existing procedures and internal controls to minimize the number of designated officials authorized to execute subaward agreements and amendments and elevate such responsibilities to more senior individuals. The designated officials will be responsible for reviewing risk assessments or subrecipient monitoring questionnaires and the most recent Single Audit of the relevant subrecipient. Prior to execution of a subaward agreement or amendment, the authorized designated officials will certify their review of risk assessment or subrecipient monitoring questionnaire and the most recent Single Audit. Texas Biomed will implement corrective action on June 1, 2023.