Finding Text
Criteria: In accordance with 2 CFR 200.332 (b) pass-thru 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 and (d) pass-thru 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. Pass-through entity monitoring must include: reviewing financial and performance reports, following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award, issuing a management decision for applicable audit findings pertaining to the Federal award provided to the subrecipient and resolving audit findings specifically related to the subaward. Condition/context: We selected the one subrecipient that the University passed federal funding to during the year ended June 30, 2022. We requested support that the University performed a risk assessment and was monitoring the subrecipient, noting the University did not perform a risk assessment and was not monitoring the subrecipient in accordance with 2 CFR 200.332 (b) or (d).Our sample was not, and was not intended to be, statistically valid.Questioned costs: None.Cause/Effect: The University does not have a clear understanding of the compliance requirements for subrecipient monitoring. The lack of subrecipient monitoring increases the risk that the subrecipient is not using the subaward for authorized purposes, in compliance with Federal statutes, regulations, or the terms and conditions of the subaward.Repeat finding: YesRecommendation: We recommend the University implement internal controls to assess the risk of the subrecipient and properly monitor any subrecipients of the University, such as reviewing single audits, financial and performance reports, or other necessary documentation of the subrecipient entity to help ensure the subrecipient is in compliance.Views of responsible officials and planned corrective actions: In agreement with the auditor?s recommendation of internal controls to properly monitor any subrecipients of the University, such as reviewing financial and performance reports of the subreceipient entity including any single audit reports. Heritage University has finalized the new ?Grant Management Policy & Procedures? manual. The grant management manual section on subrecipient is explicit about the University?s policies and procedures to ensure documentation is maintained.