Finding Text
SD 2024‐003 SUBRECIPIENT MONITORING
United States Environmental Protection Agency
ALN 66.456 – National Estuary Program
Federal Award ID Number: CE‐00D90119, 4T‐02D39922, CE‐02D56923
2024 Funding
Repeat finding
Criteria: 2 CFR 200.303 requires non‐federal entities to establish and maintain effective internal
controls. The use of subrecipients in achieving the goals of the federal award requires the
establishment of controls over the monitoring of subrecipients pursuant to 2 CFR section 200.331
and 200.332. This includes all requirements imposed by the pass‐through entity on the subrecipient
so that the Federal award is used in accordance with Federal statutes, regulations and the terms and
conditions of the Federal award and any additional requirements that the pass‐through entity
imposes on the subrecipient in order for the pass‐through entity to meet its own responsibility to the
Federal awarding agency including identification of any required financial and performance reports.
Condition: The Council did not have controls in place to obtain and review subrecipient single audit
reports as a means to ensure the subrecipients are taking timely and appropriate action on
deficiencies, if any, pertaining to the Federal award.
Cause: The Council requested audits from it's subrecipients; however, if the most recent year was not
yet available the prior fiscal year's audit was not requested to review for any deficiencies.
Effect: Without the monitoring of the results of audits and on‐site reviews, the Council may not have
sufficient information to evaluate the risks of noncompliance associated with a subrecipient.
Questioned Costs: None.
Perspective: The Council did perform monitoring activities related to the use of funds by
subrecipients; however, not all controls required for subrecipient monitoring to comply with 2 CFR
section 200.331 and 200.332 were fully implemented for the fiscal year under audit. For the 8
subrecipients sampled, audit reports were obtained for 4 subrecipients.
Recommendation: If the most recent subrecipient audit report is not yet available, management
should request the prior fiscal year if not already obtained.
Management Response: The IRL Council put controls in place to be more effective at subrecipient
monitoring following the FY 2023 finding which included the following actions:
The IRL Council reviewed all projects and activities currently allocated and funded by federal sources
to ensure the Uniform Guidance was in place within their respective agreements, and they were
amended as needed. All new subrecipient agreements funded by federal sources were not executed
until the respective federal award was in place and the Uniform Guidance language was included. The IRL Council did request audit reports from subrecipients and made statements on them, however
for the ones who had not completed their FY 2024 audit, a prior year audit report was not
immediately requested and statements for those subrecipients had not yet been made. The IRL
Council will implement a control to request prior year Financial Statements/audit reports from
subrecipients who have not yet completed their report for the year being requested during the
Council’s monitoring.