Finding 1223555 (2025-002)

Material Weakness Repeat Finding
Requirement
M
Questioned Costs
-
Year
2025
Accepted
2026-07-10
Audit: 406943
Organization: Asian Health Coalition (IL)

AI Summary

  • Core Issue: AHC lacks a formal subrecipient monitoring program, failing to meet compliance requirements for federal funding oversight.
  • Impacted Requirements: Non-compliance with 2 CFR §200.331, including missing written agreements, risk assessments, performance monitoring, and UEI verification.
  • Recommended Follow-Up: Develop a comprehensive subrecipient monitoring policy with necessary templates, assessments, and designate staff for oversight.

Finding Text

Finding 2025-002: Deficiency in Internal Control Over Subrecipient Monitoring Classification: Significant Deficiency in Internal Control Over Compliance Federal Programs: CFDA 93.310 (All of Us); CFDA 93.137 (OASH HEALS); CFDA 93.185 (Vaccination Coverage/CDC-F) Compliance Requirement: Subrecipient Monitoring — 2 CFR §§200.331–.333 Questioned Costs: None Criteria: Under 2 CFR §200.331, AHC as a pass-through entity must issue written subaward agreements containing all required elements, assess subrecipient risk prior to award, monitor subrecipient activities and performance during the award period and verify subrecipient UEIs against SAM.gov prior to payment. Condition: AHC passed approximately $542,500 through to community-based subrecipients across all three major programs during FY2025. Our testing found no written subaward agreements containing the required elements under 2 CFR §200.331(a), no pre-award risk assessments, no monitoring of subrecipient performance or financial activity, and no SAM.gov UEI verification. AHC has no formal subrecipient monitoring policies or designated staff responsible for this function. Cause: AHC has not developed a subrecipient monitoring program and has relied on informal program-level relationships with its community partners in lieu of structured compliance oversight. Effect: AHC cannot provide reasonable assurance that federal funds passed through to subrecipients were used for authorized purposes or that subrecipients complied with applicable requirements. This deficiency affects the Subrecipient Monitoring compliance requirement across all three major programs. Recommendation: AHC should establish a written subrecipient monitoring policy that includes subaward agreement templates with all required §200.331(a) elements, pre-award risk assessments, annual review of subrecipient financial and programmatic reports, SAM.gov UEI verification prior to each payment, and a designated staff member responsible for compliance oversight. Management’s Response. See accompanying Corrective Action Plan.

Corrective Action Plan

Finding 2025-002 — Subrecipient Monitoring and Required Documentation Corrective Action Plan During fiscal year 2025, the Organization did not consistently obtain or retain: (i) written pre-award risk assessments for subrecipients; (ii) Single Audit reports for subrecipients expending $750,000 or more in federal awards; or (iii) Unique Entity Identifier (UEI) confirmations via SAM.gov, as required under 2 CFR §§200.331–200.333. The affected pass-through activity totaled approximately $542,500 across three major federal programs (CFDA 93.310, 93.137, and 93.185). Management will implement the following corrective actions: • Establish a centralized subrecipient monitoring file for each subaward relationship, organized by program and award year, and confirm each subrecipient’s active UEI registration in SAM.gov at the time of award and annually thereafter. • Conduct and document a formal pre-award risk assessment using the Subrecipient Risk Assessment Questionnaire, covering prior federal experience, financial stability, internal controls, audit history, and SAM.gov registration. Perform and document a written subrecipient-vs.-contractor determination consistent with 2 CFR §200.331 before entering into or renewing any agreement. • Ensure all subaward agreements include the required award information, compliance responsibilities, reporting requirements, record retention provisions, and audit access provisions under 2 CFR §200.332. • Use the Subrecipient Desk Review Checklist to document quarterly monitoring, including review of progress reports, invoices, deliverables, indirect cost calculations, and personnel timesheets. Require supporting documentation before approving payments. • Maintain an annual Single Audit tracking log to verify federal expenditure thresholds and document collection, review, and resolution of any subrecipient audit findings. • Train program managers and accounting personnel on Uniform Guidance subrecipient monitoring requirements and present updated procedures to the Board/Finance Committee for formal adoption. Responsible Party Executive Director; Accounting Manager; Program Managers; Treasurer/Finance Committee. Completion Date Management has already begun implementation. Full implementation of the monitoring checklist and centralized files expected by September 30, 2026. Review of open FY2025/FY2026 subrecipient files and documentation requests by September 30,2026.

Categories

Subrecipient Monitoring

Other Findings in this Audit

  • 1223553 2025-002
    Material Weakness Repeat
  • 1223554 2025-002
    Material Weakness Repeat
  • 1223556 2025-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.310 AHC's National Strategy- All of Us Research Program $464,315
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $210,232
93.185 IMMUNIZATION RESEARCH, DEMONSTRATION, PUBLIC INFORMATION AND EDUCATION TRAINING AND CLINICAL SKILLS IMPROVEMENT PROJECTS $120,000
93.243 PREVENT AND REDUCE ALCOHOL USE AMONG YOUTH AND YOUNG ADULTS IN CHICAGO $118,415
93.137 COMMUNITY PROGRAMS TO IMPROVE MINORITY HEALTH $114,012
93.344 V-PROTECT: Confidence Program [Vaccinate to Protect Yourself, Your Family, and Your Community] $51,845
93.243 TOGETHER TO STOP UNDERAGE DRINKING $47,274
93.959 SUBSTANCE USE DISORDER TREATMENT $14,300