Finding Text
Significant Deficiency and Noncompliance over Subrecipient Monitoring
Repeat Finding: Yes
Condition:
Management did not verify that its subrecipient’s were not suspended or debarred or otherwise
excluded from participating in the transactions.
Criteria:
In accordance with 2 CFR §200.303, the non-Federal entity must establish and maintain effective
internal controls over the Federal award that provides reasonable assurance that the non-Federal
entity is managing the Federal award in compliance with Federal statutes, regulations, and the
terms and conditions of the Federal award.
Pursuant to 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996 (Pub. L. No. 104-156)),
2 CFR sections 200.330, .331, and .501(h), a pass-through entity must identify the award and
applicable requirements, evaluate risk, monitor, and ensure accountability of subrecipients.
Additionally, when entering into subaward transactions, the non-federal entity must verify that
the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, not suspended
or debarred or otherwise excluded from participating in the transaction. This verification may be
accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained
by the General Services Administration (GSA).
Cause:
Program personnel were unaware of the requirement included in Uniform Guidance related to
procedures required for subrecipient monitoring.
Effect:
If subrecipients were not in compliance with Uniform Guidance, the Foundation would not
identify the noncompliance timely.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the Foundation continue to improve the subrecipient monitoring controls its
Federal programs and prepare and maintain a written plan to monitor its subrecipients.
Auditee Response and Corrective Action Plan:
Refer to management’s corrective action plans.
Auditor’s Conclusion:
Finding remains as stated.