Finding Text
1. Criteria:
In title 31, Subtitle V, §6304. Using grant agreements, establishes that “An executive agency shall use a grant agreement as the legal instrument reflecting a relationship between the United States Government and a State, a local government, or other recipient when—
(1) the principal purpose of the relationship is to transfer a thing of value to the State or local government or other recipient to carry out a public purpose of support or stimulation authorized by a law of the United States instead of acquiring (by purchase, lease, or barter) property or services for the direct benefit or use of the United States Government; and
(2) substantial involvement is not expected between the executive agency and the State, local government, or other recipient when carrying out the activity contemplated in the agreement.”
Condition:
From a sample of sixty (60) subrecipient agreements, forty-seven (47) had payments before the date the subrecipient agreement were signed, as follows:
Cause:
The Authority did not execute the subrecipient agreements before to disbursing the federal funds.
Effects:
Disburement of federal funds without formal subrecipient agreements would lead to noncompliance event.
Questioned Costs:
None.
Recommendation:
We recommend management to implement a plan to ascertain compliance with required procedures to perform agreements with subrecipients before disbursements commence.