Finding 1238012 (2025-002)

2025-002 Performance of Risk Assessments on Subrecipients Federal Organization U.S. Department of Health and Human Services Assistance Listing Number 93.566 Award Number 2312-52361 Criteria [X] Compliance Finding [X] Significant Deficiency [ ] Material Weakness Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Subpart D, § 200.332, states that pass-through entities must evaluate each subrecipient’s fraud risk and risk of noncompliance with the subaward to determine the appropriate level of subrecipient monitoring needed Condition During our testing of subrecipient monitoring, we noted that there was no formal process in place to perform risk assessments on subrecipients. Context This finding appears to be a systemic issue. Cause The Organization did not implement a process to ensure that subrecipients were considered to be low risk of noncompliance with the terms and conditionsof the subaward. Effect The Organization may have passed down funds to a subrecipient who is high risk for noncompliance. Questioned Costs None identified Recommendation We recommend management implement a system to ensure that risk assessments are performed on potential subrecipients before awarding subrecipient contracts. Views of responsible officials and planned corrective action: Community-Minded Enterprises (CME) agrees with the finding and has implemented a formal Subrecipient Risk Assessment and Monitoring Policy and related procedures to strengthen its subrecipient oversight process and ensure compliance with 2 CFR §200.332.