Finding Text
Finding 2023-003: Noncompliance with Subrecipient Monitoring
U.S. Department of Health and Human Services
Federal Program: Advanced Nursing Education Workforce Grant Program
Federal Assistance Listing Number: 93.247
Federal Award Year: 2023
Repeat Finding: No
Criteria: In accordance with 2 CFR 200.332(a), pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the information listed in 2 CFR 200.332(a)(1) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward.
In accordance with 2CFR 200.332(d), pass-through entities must 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.
Condition: The Organization had memorandum of understanding agreements with each of its subrecipients. However, these agreements did not contain the information required by 2 CFR 200.332(a)(1). The Organization did not request or review the audits of its subrecipients in order to take timely and appropriate action on deficiencies detected through audits, if applicable. The Organization did not have sufficient documentation that internal controls were in place and operating effectively over risk assessment procedures required by the subrecipient monitoring compliance requirement.
Cause: The Organization did not have adequate internal controls in place to ensure the agreements with its subrecipients included the required information. Additionally, the Organization did not have adequate controls in place to properly monitor the activities of its subrecipients, or perform the necessary risk assessment procedures.
Effect: We tested two out of the four subrecipients the Organization passed funds to under this grant award. Of the two we tested, we noted that the Organization did not have properly executed subrecipient agreements with either subrecipient. We also noted that the Organization did not request the audits of either subrecipient, and did not adequately document its risk assessment.
Recommendation: We recommend the Organization enhance its internal controls over the preparation of subrecipient agreements to ensure all required information is contained in the agreements. We also recommend that management enhance its internal controls over subrecipient monitoring to ensure that its subrecipients are utilizing the funds for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward.
View of responsible officials of the auditee: Management agrees with the finding and recommendation.