Finding Text
Finding 2021-009 Monitoring Activities - 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 that pass-through entities monitor the activities of
the subrecipient as necessary to ensure that the subaward is used for
authorized purposes, in compliance with Federal statutes, regulations, and
the terms and conditions of the subaward; and that subaward performance
goals are achieved. 2 CFR 200.332 also requires pass-through entities to
verify that every subrecipient is audited as required by Subpart F of this
part when it is expected that the subrecipient's Federal awards expended
during the respective fiscal year equaled or exceeded the threshold set
forth in 2 CFR 200.501.
Condition The City did not have controls in place to monitor subrecipient activities
and ensure the subrecipient was audited in accordance with 2 CFR 200.501
if applicable.
Cause Staff were not fully trained on the informational requirements and
monitoring responsibilities related to audit requirements.
Effect or potential
effect
The City was not in compliance with subrecipient requirements outlined in
2 CFR 200.332. Furthermore, not communicating proper compliance
requirements and other information may increase the likelihood of noncompliance
on the part of the subrecipient and non-fulfillment of program
goals and objectives.
Questioned costs Not applicable. Context We were not able to verify controls over subrecipient monitoring. The audit
of the subrecipient was completed by other auditors including an audit in
accordance with the Uniform Guidance requirements on December 3, 2021.
The City obtained the audited reports in April 2023.
Identification as a
repeat finding
Not a repeat finding.
Recommendation Management should establish policies and procedures 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 a
ward information.