Finding 1227938 (2025-002)

Significant Deficiency in Internal Control Over Compliance and Noncompliance Related to Management Decisions for Subrecipient Audit Findings Identifying Award Information Federal Agency: U.S. Department of Commerce, National Oceanic and Atmospheric Administration (NOAA) Assistance Listing Number: 11.472 Federal Program: Unallied Science Program Criteria Under the requirements for pass-through entities in 2 CFR 200.332, 2 CFR 200.521, and related sections, the pass-through entity is required to monitor the activities of a subrecipient. This includes among other things, obtaining the Single Audit reports for the subrecipient and identify any findings report directly related to the pass-through entity’s subaward to the subrecipient. The pass-through entity is responsible for issuing a management decision for audit findings that affect subawards it issues to subrecipients under a Federal award. Condition and Context Among the five sub-awards we tested, one subrecipient had an audit finding directly related to NPRB’s subaward to that subrecipient. NPRB did not retain documentation evidencing that NPRB followed up with the subrecipient to issue a management decision related to the finding. Cause NPRB did not have procedures and controls in place to ensure the required management decisions were issued to subrecipients. Effect NPRB did not comply with the manage decision requirement for pass-through entities that are codified in Title 2 U.S. Code of Federal Regulations. Known Question Costs Not applicable. Repeat Finding This is not a repeat finding. Recommendations We recommend that management update procedures to ensure subrecipient Single Audit reports are reviewed and management decisions are communicated, and related documentation is retained. Views of Responsible Officials Management concurs with the finding and has provided the attached corrective action plan.