Finding Text
2023-001 Finding – Federal Award
Type:
Subrecipient Monitoring – Material Non-Compliance and Weakness in Internal Control Over Compliance.
Identification of Federal Program:
21.027 – Coronavirus State and Local Fiscal Recovery Funds
10.182 – Food Bank Network
Criteria / Requirement:
The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
In accordance with 2CFR§200.332, a pass-through entity must clearly identify to the subrecipient the award as a subaward by providing the required federal information related to the award, all requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the provisions of contracts and grants agreements. The pass-through entity must evaluate risk of non-compliance of each subrecipient, monitoring the subrecipient and ensuring accountability of for-profit subrecipients.
Condition / Context:
Oregon Food Bank, Inc. passed through $4,027,781 in funding to subrecipients under Assistance Listing 21.027 and $1,825,785 in funding to subrecipients under Assistance Listing 10.182. During our audit, we noted that Oregon Food Bank, Inc. did not have formal written procedures or controls in place to ensure compliance with the U.S. Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) subrecipient monitoring requirements. Per review of subaward contracts, required federal contract information was not clearly identified. Further, there was not adequate documentation that subrecipients were evaluated for risk of non-compliance. Subrecipients were not sufficiently monitored as procedures were informal and were not applied consistently.
Cause:
Procedures are not in place to ensure that Oregon Food Bank, Inc. is providing adequate subaward contracts or maintaining proper subrecipient monitoring for each federal subrecipient.
Effect:
Failure to maintain sufficient subrecipient contracts and monitoring may result in the wrongful use of federal funds and non‐compliance with the provisions of applicable requirements of the federal award.
Questioned Costs: None. Recommendation:
Oregon Food Bank, Inc. should establish written policies and procedures regarding the contracting and monitoring of subrecipients that are in line with Uniform Guidance requirements, as well as establish organizational controls to ensure that such policies and procedures are being followed.
Management’s response:
Management concurs with the audit finding.