Finding Text
Finding 2023-001: Subrecipient Monitoring and Reporting
Federal Programs: Assistance Listing Number #19.522
Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient. Also, as noted in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements who make first tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through FSRS.
Condition: A full and complete risk assessment for each potential subrecipient was not documented for two subrecipients in our sample. In addition, WRC did not register their subawards in FSRS.
Cause: WRC did not document the risk assessment procedures it performed and did not apply the latest compliance supplement issued by the Office of Management and Budget regarding subaward reporting requirements in FSRS.
Effect or Potential Effect: WRC could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight (i.e. monitoring) to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward. Also, WRC failed to provide the required reporting on subrecipients within FSRS in compliance with the Uniform Guidance.
Questioned Costs: None noted.
Context: WRC did not document the risk assessments it performed on the two subrecipients in our sample and did not register subawards in excess of $30,000 with FSRS.
Identification as a Repeat Finding, if Applicable: Not applicable.
Recommendation: We recommend that WRC ensure that risk assessment procedures over its subrecipients are performed and documented prior to providing subawards. Based on these risk assessments, WRC should assign a risk level to each subrecipient and then determine the monitoring tools to apply based on these risk levels. We also recommend that WRC update its policies and procedures to ensure all first tier subawards in excess of $30,000 are accurately and timely registered in FSRS and WRC should ensure subawards are reported in FSRS within the required time-frame.