Finding Text
Finding 2023-002 Material Weakness: Subrecipient Monitoring - Compliance
and Control Finding
ALN 93.391: Activities to Support State, Tribal, Local and Territorial (STLT)
Health Department Response to Public Health or Healthcare Crises
Federal Agency: U.S. Department of Health and Human Services
Pass-through Entity: City of Chicago, Illinois
Criteria Or Specific Requirement: Per 2 CFR 200.332, the Project is responsible for
evaluating each subrecipient’s risk of noncompliance with Federal statutes, regulations,
and the terms and conditions of the subaward as well as informing subrecipients of the
Federal award identifiers including but not limited to award date, period of
performance, Federal awarding agency, Assistance Listing Number and program name.
The Project is required to monitor subrecipients’ compliance with Federal statutes,
regulations and the terms and conditions of the subaward. The monitoring policy should
include an initial evaluation of the risk of noncompliance to determine the appropriate
level of monitoring required related to the subaward and ensure the continued
monitoring of the subrecipients, inclusive of review of subrecipients’ single audit
reports, when applicable.
Condition: We noted that management did not evaluate the risk of noncompliance of
its subrecipients and did not provide subrecipients with required information.
Cause: Management does not have an internal control process in place to ensure proper
subrecipient monitoring.
Effect: The Project was not in compliance with the subrecipient monitoring regulations
set forth in the Uniform Guidance. Further, the amount of funding passed through to
subrecipients was material to the program.
Questioned Costs: None
Context: During the testing performed, we noted the Project did not perform a risk
assessment of subrecipients and documentation informing subrecipients of all required
rules and regulations related to federal funding was not maintained.
Identification As A Repeat Finding: N/A
Recommendation: We recommend that management implement a formal subrecipient
monitoring policy that defines how the Project will monitor each subrecipient. This
policy should include an evaluation of the risk of noncompliance for each subrecipient as
well as how the subrecipients will be monitored. The Project should also request a copy
of the subrecipients’ single audit, as applicable.
Views Of Responsible Officials And Planned Corrective Action: An adequate
subrecipients risk assessment policy will be put in place to evaluate and monitor
subrecipients. Southwest Organizing Project will provide subrecipients with all
required federal awards identifiers. Subrecipients will be required to provide a single
audit when applicable and a signed statement if not applicable. Management will
monitor receipt of single audits during the budgeting process and when closing out
programs as well as record keeping for audit and reporting evidence.