Finding Text
Finding 2024-002: Subrecipient Pre-Award Risk Assessment
Information on Federal Program: 47.074
Criteria or Specific Requirement: CFR § 200.332, "Requirements for pass-through entities",
requires pass-through entities to 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.
Condition: As part of our audit, we selected a sample of subawards charged to the major Federal
programs. We noted that subaward risk assessments were not available for our inspection for
those samples selected.
Cause: The Society did not perform subaward risk assessments as required by Federal regulation.
Effect or Potential Effect: The Society may have inadvertently failed to perform monitoring
procedures appropriate for a subrecipient’s assessed level of risk.
Questioned Costs: N/A
Context: The Society executes subaward agreements under US Federal grants. Therefore, the
Society is subject to CFR § 200.332 "Requirements for pass-through entities". Our audit
procedures consisted of test work completed on subawards and individual expenditures charged to
the Federal awards. The report in which samples were selected was generated directly from the
Society's general ledger (accounting system). There was total population of three subrecipients
and our sample size was one. We consider our sample to be representative of the population.
Identification of Repeat Finding, if Applicable: N/A
Recommendation: We recommend that the Society enhance their pre-award risk assessment
policy and monitoring procedures to ensure that their subrecipients have accounting systems in
place and adequate internal controls to administer the grant. The Society should also identify and
apply appropriate sanctions for subrecipient noncompliance.