Finding Text
Finding 2023-002: Pre-Award Risk Assessment for Sub-Recipient
Information on the Federal Program: 93.048
Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each
subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions
of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to
prescribe to each individual subrecipient.
Condition: During our testing performed over subrecipient expenditures, we were unable to obtain
evidence that pre-award risk assessment procedures were performed over subrecipients, consistent
with 2 CFR §200.332(b).
Cause: The Organization's internal policies and procedures governing risk assessment on
subrecipients was not performed.
Effect or Potential Effect: The Organization could inadvertently be engaged in relationships with
subrecipients of higher risk without the appropriate level of oversight to ensure subrecipients are
expending funds in accordance with the provisions and terms of the subaward.
Questioned Costs: None noted.
Context: Our audit procedures consisted of substantive testwork over a sample of subrecipients. We
consider our sample to be representative of the population. The samples were made using statistical
sampling and we believe the condition appeared to be systematic in nature.
Identification as a Repeat Finding, if Applicable: Not a repeat finding.
Recommendation: We recommend that the Organization follow their internal policies regarding
performing a pre-award risk assessment on all new sub-recipients engaged throughout the life of the
award. For repeat sub-recipients, the risk assessment should be re-visited throughout the award term
to ensure that conditions have not changed and the original risk assessment remains reasonable.