Finding 1221358 (2025-005)

Criteria or specific requirement: Uniform Guidance §200.332 requires pass‑through entities to monitor the activities of subrecipients to ensure federal awards are used for authorized purposes and in compliance with applicable federal statutes, regulations, and the terms and conditions of the award. Subrecipient monitoring controls should be designed and implemented to identify and resolve audit findings and ensure ongoing compliance. In addition, Uniform Guidance §200.303(c)–(d) requires entities to evaluate and monitor compliance and take prompt action when instances of noncompliance are identified. Condition: The City and County of Denver (the City) did not document a review of the subrecipient’s Single Audit report for the WIOA Cluster during the fiscal year. The City has one subrecipient for this program. As part of our audit procedures, we noted the subrecipient’s Single Audit report had no findings related to WIOA programs. For the subrecipient selected for testing, the City completed an initial risk assessment and evaluation at contract inception and performed other subrecipient monitoring activities. No instances of subrecipient noncompliance were identified through our testing. Questioned costs: None Context: The audit included procedures to evaluate the design and implementation of internal controls over subrecipient monitoring for the WIOA Cluster. The condition represents a control execution deficiency related to the monitoring framework. The deficiency was limited to one subrecipient and did not result in questioned costs or identified program noncompliance. Cause: Management did not document review of the subrecipient’s Single Audit report and monitoring activities were primarily focused on alternative oversight procedures. Effect: The absence of documentation of the subrecipient’s Single Audit report reduces the effectiveness of internal controls over subrecipient monitoring and increases the risk that subrecipient noncompliance may not be detected in a timely manner. Due to the limited number of subrecipients, mitigating oversight activities, and the absence of subrecipient findings, no material noncompliance or questioned costs were identified. Repeat Finding: No Recommendation: We recommend that management document review of subrecipient Single Audit reports when available. Views of responsible officials: There is no disagreement with the audit finding.