Finding Text
CRITERIA/SPECIFIC REQUIREMENT:
The Code of Federal Regulations (Code) (2 CFR § 200.332 (g)) requires the Regional Office of Education No. 39 to verify every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR § 200.501.
The Code (2 CFR § 200.332 (e)) requires the Regional Office of Education No. 39 to monitor the activities of the subrecipient to ensure 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.
The Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over subrecipient monitoring.
CONDITION:
The Regional Office of Education No. 39 did not have adequate controls over subrecipient monitoring in compliance with the Code.
CONTEXT:
During our testing of nine subrecipients, we noted the following:
The Regional Office of Education No. 39 did not verify whether subrecipients were required
to be audited.
The Regional Office of Education No. 39 did not have written policies and procedures for
subrecipient monitoring and could not provide evidence the Regional Office of Education
No. 39 monitored its subrecipients during the audit period.
EFFECT:
Lack of controls over subrecipient monitoring may result in subrecipients not properly administering the federal programs in accordance with federal regulations.
CAUSE:
Management indicated this was due to oversight and staffing limitations by previous management.
RECOMMENDATION:
We recommend the Regional Office of Education No. 39 establish and implement procedures over subrecipient monitoring.
MANAGEMENT’S RESPONSE:
The Regional Office of Education No. 39 agrees with the audit findings and although some
subrecipient monitoring was conducted, it may not have been sufficiently documented. The
Regional Office of Education No. 39 is implementing policies and procedures to ensure
subrecipient monitoring is not only conducted but documented as well.