Finding 5655 (2022-001)

Finding 2022-001 Noncompliance and Significant Deficiency in Internal Control – Subrecipient Monitoring Agency Department of the Treasury Pass-through Entity State of Alaska Department of Commerce, Community and Economic Development Assistance Listing 21.019 Program Coronavirus Relief Fund – COVID-19 Award Year FY 2022 Criteria or specific requirement Management is responsible to ensure that subrecipients comply with the terms and conditions of 2 CFR Part 200, Subpart F. This includes ensuring that every subaward is clearly identified to the subrecipient as a subaward and include the necessary information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. This also includes verifying that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold. Condition While the subaward included the required federal award information and applicability of 2 CFR Part 200, the City did not implement monitoring procedures to ensure audits in accordance with Uniform Guidance were performed within the required timeframe or review those results. Cause Internal controls were not in place throughout the entire fiscal year to ensure that all required subrecipient monitoring responsibilities took place. Effect or potential effect Subrecipients may be unaware and not in compliance with the requirements of 2 CFR Part 200. Questioned costs None Context Subrecipient monitoring testing identified 2 out of 3 subawards that did not have the support to verify notification and monitoring of subrecipient compliance in accordance with 2 CFR Part 200, Subpart F. Identification as a repeat finding No Recommendation Management should establish policies to address the monitoring of subrecipient compliance with 2 CFR Part 200, Subpart F. Views of responsible officials Management will establish policies and procedures to address the monitoring of subrecipient compliance in accordance with 2 CFR Part 200, Subpart F.