Finding Text
Finding 2021-008 Subrecipient Agreements - Subrecipient Monitoring – Material
Noncompliance and Material Weakness in Internal Control over Compliance
Agency Department of the Treasury
ALN 21.019
Program COVID-19 - Coronavirus Relief Fund
Award Year FY 2021
Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic
Development
Pass-Through Entity
Identifying
Number
20-CRF-024
Criteria 2 CFR 200.332 requires pass-through entities to ensure that subrecipients
comply with the terms and conditions of 2 CFR 200.501 related to audit
requirements. This includes ensuring that every subaward is (1) clearly
identified to the subrecipient as a subaward; (2) includes the necessary
information at the time of the subaward for subrecipient reporting on federal
awards (2 CFR 200.332) and (3) includes requirement to follow 2 CFR 200.501
if expenditure thresholds are met. This also includes verifying that every
subrecipient is audited as required by 2 CFR 200.501 if the subrecipient's
Federal awards expended during the respective fiscal year equaled or
exceeded the threshold.
Condition During our testing of subrecipient monitoring, we noted the subrecipient
agreements did not include the required federal award identification or
applicability of audit requirements. No action was taken to ensure the
subrecipients were audited in accordance with 2 CFR 200.501 if applicable.
Cause The issuance of subrecipient agreements for these grants related to new
funding streams in response to the COVID-19 pandemic. Significant amounts
of funding were provided in a short period of time, and systems to distribute
these monies were newly created and implemented. The standard award
agreements were not reviewed in advance to ensure adherence to federal
requirements. Staff were not fully trained on the informational requirements
and monitoring responsibilities related to audit requirements.
Effect or potential
effect
Subrecipients may be unaware and not in compliance with the requirements
of 2 CFR Part 200.
Questioned costs Not applicable.
Context We tested the sole subaward agreement for the program and noted the
agreement did not contain the necessary language under 2 CFR 200.332 to
inform subrecipients of the applicability of 2 CFR 200, Subpart F.
Identification as a
repeat finding
Not a repeat finding. Recommendation Management should establish policies to ensure subawards contain required
federal award information. In addition, procedures should be established to
monitor subrecipient compliance with audit requirements of 2 CFR 200.501.
Views of
responsible officials
Management concurs with the finding. Management will revise policies and
procedures related to subrecipient monitoring and will ensure that policies
are established to ensure subawards contain the required federal award
information.