Finding Text
Finding number: 2024-005
Significant Deficiency – Lack of Internal Control Over Compliance with Subrecipient Monitoring Policy
Assistance Listing Number #21.027
Criteria: Pursuant to CFR section 200.332(b), pass-through entities must 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: The Unity Council did not perform a risk assessment of subrecipients. This is a repeat finding.
Cause: The Organization does not have a formally documented policy for performing a risk assessment over subrecipients.
Effect or potential effect: A risk assessment for purposes of determining the appropriate subrecipient monitoring was not performed.
Recommendation: Management should develop a risk assessment policy to evaluate the risk profile of each subrecipient. Factors included during the evaluation can include the subrecipient's prior experience with the same or similar subawards, results of previous audits, whether the subrecipient has new personnel or new or substantially changed systems, and the extent and results of federal awarding agency monitoring.
View of responsible officials: Management is in agreement with the finding and is in the process of developing and documenting a more robust risk assessment process.