Finding 406010 (2023-006)

Subrecipient Monitoring Federal Department – U.S. Department of Health and Human Services Federal Award Identification Number and Year: NU58DP006993 and 2022/2023 COVID-19 - Community Health Workers for Public Health Response and Resilient, Federal Assistance Listing #93.495 County Department – Department of Public Health Finding 2023 – 006 CRITERIA 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D—Post Federal Award Requirements Standards for Financial and Program Management, Section 200.332. Requirements for pass-through entities, requires that “All pass-through entities must: (b) 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 described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F—Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in Section 200.208 Specific conditions. (d) 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. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by Section 200.521 Management decision. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in Section 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F— Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in Section 200.501 Audit requirements. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in Section 200.338 Remedies for noncompliance of this part and in program regulations.” CONDITION During the current audit period, the Cook County Department of Public Health (DPH) did not perform adequate monitoring of its subrecipients as required by Federal regulations. CAUSE Based on discussions with management, the cause of this finding was due to DPH/CCH identifying a consultant agency to conduct the subrecipient monitoring; this was accomplished October 2023. Current Status: These documents were created, shared with the auditor pending management approval; 1) Subrecipient Monitoring Policy 2). Subrecipient Commitment Form 3). Subrecipient Determination Tool 4). Subrecipient Risk Assessment and Monitoring Guide. EFFECT Failure to adequately monitor the activities and performance of a subrecipient could result in Federal awards being used for unauthorized purposes and DPH’s inability to adequately perform risk assessments on its subrecipient(s). QUESTIONED COSTS None. CONTEXT During the current audit period, we noted 12 subrecipients were awarded funds. During our review of three (3) subrecipients, we noted the following:  For all three subrecipients, we noted that adequate documentation was not maintained to support the financial monitoring of these subrecipients. Also, no documentation was provided to verify whether the subrecipients were required to have a Single Audit conducted, including DPH’s review of the report, and if applicable, issuance of a management decision on audit findings noted as required by 2 CFR 200.332d(3).  For one subrecipient, we noted documentation was not maintained to support DPH’s evaluation of the subrecipient’s risk of noncompliance and the frequency of monitoring to be conducted by DPH based on the assessed risk. IDENTIFICATION OF REPEATED FINDINGS None. RECOMMENDATION We recommend DPH implement procedures to ensure that adequate documentation is maintained to support financial monitoring conducted, evaluation of each subrecipient’s risk of noncompliance and review of the Single Audit report, as required by federal regulations. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The County agrees with the finding and recommendation. The County’s corrective action plan is on page 56.