Finding Text
2025-002 – Subrecipient Monitoring Activities (repeat finding) Finding Type. Immaterial Noncompliance/Significant Deficiency in Internal Control over Compliance (Subrecipient Monitoring). Program. Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; ALN 21.027, Small Business Support Hubs Program passed through the Michigan Strategic Fund. Criteria. When a grant recipient makes subawards to other recipients, certain compliance requirements are required in order to monitor the activity of the subrecipients. The following are included as requirements of the pass-through entity: (a) identify the award and applicable requirements, (b) evaluate risk related to the subrecipient, and (c) monitor the activities of the subrecipient. Condition. Although there were improvements in the monitoring process from the prior year, during testing in the current year of seven subrecipients, it was determined: 1) The Assistance Listing Number (ALN) for the grant was not included in the subgrant agreement. All other applicable program information was noted, 2) Searches at www.sam.gov performed by management were not timely reviewed and no certification of eligibility was present in the subgrant agreements. Cause. This condition was caused by management oversight in knowing the federal compliance requirements of the grant. Effect. As a result of this condition, the Organization did not fully comply with the requirements of the Uniform Guidance. Questioned Costs. No costs were required to be questioned as a result of this finding inasmuch as our testing did not identify any unallowed costs. Recommendation. We recommend that management become familiar with the subrecipient monitoring requirements and draft a policy and procedures that provide reasonable assurance that future subrecipient arrangements will be in compliance with the Uniform Guidance. View of Responsible Officials. Management accepts this finding and prepared a Corrective Action Plan