Finding Text
Federal Program Information
Funding Agency: U.S. Department of Education
Federal ALN: 84.425B COVID-19 Coronavirus Education Stabilization Fund,
Discretionary Grants: Rethink K-12 Education Models Grants
Pass Through Agency: State of Tennessee, Department of Education
Criteria
As required by the Uniform Guidance, non-federal entities are required to monitor the use of funds provided to subrecipients.
Condition
PENCIL did not have a written agreement with the subrecipient setting forth the terms of the arrangement and required use of funds, nor did PENCIL produce evidence of subrecipient monitoring of the appropriate use of funds by the subrecipient.
Cause
PENCIL had not received federal funding previously and was not aware of the subrecipient monitoring requirements of the Uniform Guidance.
Effect
Funds provided to subrecipients may have been used inappropriately or not in furtherance of the program objectives.
Auditor's Recommendations
PENCIL should execute a written agreement with the subrecipient that outlines the responsibilities under the grant agreement that are passed through. PENCIL should also establish monitoring policies to ensure that the subrecipient is using the funds in accordance with the agreement. PENCIL should then conduct the required procedures to monitor the use of funds, check status of programs and obtain regular updates sufficient to satisfy themselves regarding the appropriate use of funds in accordance with the requirements of the federal award and any related contracts.
Management Response
Management agrees with the auditor’s recommendation. PENCIL should communicate the compliance requirements for staff involved in the distribution of funds to subrecipients. The staff should conduct the required procedures to monitor the use of funds, check status of programs and obtain regular updates sufficient to satisfy themselves regarding the appropriate use of funds in accordance with the requirements of the federal award and any related contracts.