Finding Text
U.S. Department of Treasury Federal Financial Assistance Listing 21.027 Coronavirus State and Local Fiscal Recovery Funds Subrecipient Monitoring Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria – Per 2 CFR 200.332, Johnson County is responsible for informing subrecipients of the Federal award identifiers including but not limited to award date, period of performance and Federal awarding agency and Assistance Listing Number and title. Johnson County is required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. In addition, the County should also verify that the subrecipient is audited as required by Subpart F - Audit Requirement under the Uniform Guidance. The monitoring policy should include an initial evaluation of the risk of noncompliance to determine the appropriate level of monitoring required related to the subaward as well as appropriate awarding documentation. Condition – During our testing, we evaluated the procedures for evaluating subrecipient’s risk of noncompliance with Federal statutes, regulations and the terms and conditions of the subaward. We noted the following: For three (3) of three (3) subrecipients selected, the required evaluation of the subrecipient’s risk of noncompliance was not documented. For one (1) of three (3) subrecipients selected, the County did not provide a formal subrecipient agreement including the required information noted in 2 CFR 200.332. Cause – The County did not adhere to their established policies and procedures relating to risk assessment when a subrecipient contract is awarded. Effect – The County’s policies were not consistently followed, resulting in noncompliance with subrecipient monitoring requirements in 2 CFR 200.332. Additionally, the County’s control policies were not consistently followed. Questioned Costs – None reported. Context/Sampling – The sample of three (3) subrecipients were selected for subrecipient monitoring testing for the direct award from the US Department of Treasury. The total population across the program was thirteen (13) subrecipients. Repeat Finding from Prior Years – No. Recommendation – We recommend that the County adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. View of Responsible Officials – The understanding of current staff is that the risk assessments were completed as appropriate, however, due to staff turnover the documents have been misplaced and no longer seem to be available. Applicable County teams are working to adopt standards for what documentation is necessary to establish the basis for a transaction, as well as standardizing the repository for such documentation.