Finding Text
Criteria or specific requirement – A non-federal entity must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statues, regulations, and the terms and conditions of the subaward. The pass-through entity is responsible for monitoring the overall performance of a subrecipient to ensure that the goals and objectives of the subaward are achieved. In monitoring a subrecipient, a pass-through entity must review financial and performance reports; ensure that the subrecipient takes corrective action on all significant developments that negatively affect the subaward such as single audit findings related to the subaward, issue a management decision for audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity, and resolve audit findings specifically related to the subaward.
Condition – For one of the subrecipients selected for testing, CSS noted that monitoring is not completed.
Context – Of the eight subrecipients that received pass-through funding from CSS, we randomly selected three for testing. Our random sample was not, nor intended to be, statistically valid. One of the three subrecipients was not monitored appropriately.
Effect – The subrecipient may have findings related to the grant funding provided by CSS which were unknown and not adequately addressed by CSS.
Cause – CSS did not have the appropriate controls in place over the subrecipient monitoring process.
Repeat finding – No.
Recommendation – We recommend CSS revise their procedures to include all subrecipients in their monitoring procedures, obtaining audit reports for all subrecipients to ensure there are no audit findings related to the subaward and issue management decisions for any audit findings that are identified.
Views of Responsible Officials – Management agrees with the finding and recommendation.