Finding Text
Criteria - Per 2 CFR 200, pass-through 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. Condition - During our testing of subrecipient expenditures for the year ended June 30, 2022, we selected a total of 6 transactions for testing compliance with federal procurement requirements. For 2 of the 6 transactions selected, we noted that the subrecipient did not follow the procurement process as outlined in 2 CFR 200. Known Questioned Costs - $1,108,473 Cause - During their monitoring of subrecipients, the District did not appropriately identify activities of a subrecipient that were not in accordance with federal procurement requirements. Effect - Subrecipient costs could have been incurred for projects which were not conducted in a manner providing full and open competition. Recommendation - We recommend the District update their subrecipient monitoring process to include procedures which would appropriately identify amounts expended by subrecipients that were not in accordance with federal procurement requirements. Management Response - The finding is acknowledged. The District now provides a federal grant procurement manual to subrecipients to assist in procurement compliance and has put in place additional monitoring processes to ensure compliance of subrecipients.