Finding 390868 (2023-001)

Finding 2023-001: Subrecipient Monitoring – Significant Deficiency U.S. Department of Treasury COVID-19 Emergency Rental Assistance Program, Assistance Listing No. 21.023 Federal Award Year: 2023 Criteria: A pass-through entity must monitor the activities of subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: • Reviewing financial and programmatic (performance and special reports) required by the pass-through entity. • Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. • Issuing a management decision for findings pertaining to the federal award provided to the subrecipient from the pass-through entity as required by 2 CFR section 200.521. Condition: The County did not have adequate internal controls in place to obtain and review the detailed records that supported the subrecipient’s quarterly expenditure reports. In addition, the County did not obtain the subrecipient’s audit reports and or issue management’s decisions on any findings that were reported. Cause: Management of the County did not have adequate internal controls in place to meet the compliance requirements of this federal grant program. Effect or potential effect: Inadequate monitoring of subrecipients could result in actions take by the oversight agency which could impact future funding. Questioned costs: None Context: Federal grant award of $6 million was passed through to one subrecipient during the year ending June 30, 2023 under this program. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the County establish controls to ensure that program staff understand and follow necessary requirements for monitoring subrecipients. Views of responsible officials and auditee: Management agrees with the finding.