Finding Text
2024-001
Federal Agency - Department of Agriculture
Federal Program Title - Partnerships for Climate-Smart Commodities
Assistance Listing Number - 10.937
Federal Award Identification Number - NR233A750004G023
Award Period - 10/1/23 - 9/30/24
Type of Finding - Significant Deficiency in Internal Control over Compliance; Compliance, Other Matters
Condition - No monitoring policies or procedures have been implemented for NSPA's subrecipient awards, and NSPA did not include required information in the subrecipient subaward agreement.
Criteria - Uniform Guidance requires all pass-through entities ensure that every subaward is clearly identified to the subrecipient as a subaward and include information to comply with Federal statutes, regulations, and the terms and conditions of the award. The required information includes the subrecipient's DUNS number, ALN and name, federal award date, and further additional requirements. When some of this information is not available, the pass-through entity shall provide the best information available to describe the Federal award. Uniform Grant Guidance requires nonfederal entities receiving Federal awards monitor the activities of the subrecipient as necessary to ensure the subaward is used for authorized purposes, in compliance with compliance with Federal statutes, regulations and the terms and conditions of the subaward and the performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial reports and performance reports required by the pass–through entity and (2) following up and ensuring the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on site reviews and other means. Uniform Grant Guidance requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements.
Questioned Costs - N/A
Context - We tested subrecipient awards made by NSPA related to our audit period and determined that no monitoring procedures were performed. Additionally, out of 9 subrecipients, we identified 6 subrecipients that did not have the required information included in the subaward agreement.
Cause - This grant program and the reporting requirements were new for NSPA in fiscal year 2024. NSPA did not have effective controls in place to ensure subrecipient monitoring was complete and timely.
Effect - Failure to monitor subawards may result in unauthorized uses of federal funds passed-through to subrecipients.
Recommendation - We recommend that NSPA implement policies and procedures to ensure controls are in place to properly monitor subrecipient awards.
Views of Responsible Officials - Management agrees with the finding and has developed a plan to correct the finding.