Finding 33457 (2022-003)

Significant deficiency in internal controls over compliance and instances of noncompliance related to subrecipient monitoring. Federal Agency: Department of Health and Human Services Program Title: National Organizations of State and Local Officials CFDA Number: 93.011 Award Numbers: 1 G32HS42592-01-00 Award Period: July 31, 2021 - July 31, 2023 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart D (as codified by the Department of Health and Human Services [DHHS] in 45 CFR 75) requires a pass-through entity to adopt compliance policies to ensure sub-recipients comply with requirements under the award, and evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of such agreements for the purposes of determining appropriate subrecipient monitoring. Condition/Context for Evaluation In a population of three subrecipients, no documentation was available showing an assessment of the risk of noncompliance of the subrecipients. For one subrecipient, a fixed fee award was issued that had not received prior approval by the federal funder. As such, when the payment to the subrecipient was made based on a fixed amount, the Organization was not monitoring to ensure the subrecipient was minimizing the time lapse between the receipt of payment and expenditures incurred. Questioned Costs Not applicable. Cause The Organization?s subrecipient monitoring policy did not include all the required provisions outlined in 2 CFR 200.332. Effect or Potential Effect The Organization did not fully comply with the requirements regarding subrecipient monitoring. Repeat Finding Not applicable. Recommendation We recommend that the Organization update the subrecipient monitoring policy to ensure a risk assessment is performed over all subrecipients and that any fixed fee awards receive prior approval from the federal funder. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying corrective action plan.