Finding Text
2022-005 – Subrecipient Monitoring Program: Congressional Appropriations Program (ALN 99.U19) Federal Agency: United States Department of Treasury Criteria: In accordance with 2 CFR part 200.332(e) pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In accordance with 2 CFR part 200.303(a), nonfederal entities receiving federal awards must establish, document, and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include ensuring on-site review procedures are performed in a timely manner, are designed to monitor fiscal controls, and are performed to ensure compliance with program regulations. Condition: The Organization enters into agreements with subrecipients and, as part of its subrecipient monitoring procedures, requires subrecipients to submit quarterly vouchers and audited financial statements. However, the Organization did not consistently maintain evidence that audited financial statements were obtained and reviewed or that quarterly vouchers were reviewed and reconciled to amounts reported by subrecipients in the Online Reporting System. Cause: Management did not implement adequate procedures to ensure that required subrecipient monitoring activities were performed and documented in accordance with the Organization’s policies and 2 CFR 200.332(e). Effect: Failure to conduct monitoring of subrecipients results in noncompliance with 2 CFR part 200.332(e) and a failure of the internal control environment surrounding subrecipient monitoring. In addition, failure to conduct monitoring of subrecipients could result in disallowed costs. Questioned Costs: Undetermined Context: The Organization issued 20 subawards during the year. Of the 4 subrecipients selected for testing through nonstatistical sampling, 1 subrecipient lacked evidence that audited financial statements were obtained and reviewed. In addition, for 4 out of 4 subrecipients tested, the Organization did not maintain evidence that quarterly vouchers were reviewed and reconciled to amounts reported by the subrecipients in the Online Reporting System. Repeat Finding: No Recommendation: We recommend that the Organization review and enhance their current procedures to ensure monitoring procedures are documented and maintained. Views of Responsible Officials: See Corrective Action Plan.