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Federal Program Information Federal Agency: National Endowment for the Arts Award Name(s): Promotion of the Arts Partnership Agreements Assistance Listing Number(s): 45.025 Award Year: 2020 Compliance Requirement: Subrecipient Monitoring Type of Finding Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires that a pass-through entity must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information as required in 2 CFR 200.331(a). Additionally, a pass-through entity must evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward as required in 2 CFR 200.331(b). Condition and Context During our audit, we tested a sample of 16 of 105 subrecipients to determine if the subrecipient agreements contained all required elements per 2 CFR 200.331(a) and ensure sufficient evaluation of the subrecipient’s risk of noncompliance was performed. As a result of our testing, it was identified that the agreements tested did not contain the subrecipient’s unique entity identifier, federal award identification number, federal award date, and federal award project description. Additionally, the Organization did not perform an evaluation of the subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring. Cause The Organization did not have adequate controls in place to ensure all required elements were included in subrecipient agreements or to evaluate risk of subrecipient’s noncompliance. Effect or Potential Effect Due to the weakness in internal controls and compliance finding noted above, the Organization did not comply with the requirements of the Uniform Guidance regarding communication to subrecipients all the specified elements in 2 CFR 200.331. This impacts the subrecipients’ ability to properly identify federal funding. No questioned costs are reported as this requirement is administrative in nature. Recommendation The Organization should update its subrecipient agreements, policies, and procedures to ensure inclusion of all required elements and implement risk assessment procedures to comply with the Uniform Guidance. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.