Finding Text
CRITERIA/SPECIFIC REQUIREMENT:
The Code of Federal Regulations (Code) (2 CFR § 200.332 (a)) requires the Regional Office of Education No. 39 (ROE) to 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 name and unique entity identifier, assistance listing number, federal award date, federal awarding agency, etc. When some of this information is not available, the pass-through entity shall provide the best information available to describe the Federal award.
The Code (2 CFR § 200.332 (f)) requires the ROE to verify every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR § 200.501.
The Code (2 CFR § 200.332 (d)) requires the ROE to monitor the activities of the subrecipient to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved.
The Code (2 CFR §200.303 (a)) requires the ROE to establish and maintain effective internal control over the federal award to provide reasonable assurance the ROE is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over subrecipient monitoring.
CONDITION:
The ROE did not have adequate controls over subrecipient monitoring in compliance with the Code.
CONTEXT:
During our testing of four subrecipients, we noted the following:
• The ROE did not communicate the required federal award information to all (100%) subrecipients to comply with federal statutes, regulations, and the terms and conditions at the start of the award. All the subaward agreements were signed and became effective after the start date of the grant.
• The ROE did not verify whether subrecipients were required to be audited or not.
• The ROE did not have written policies and procedures for subrecipient monitoring and could not provide evidence the ROE monitored its subrecipients during the audit period.
EFFECT:
Lack of controls over subrecipient monitoring may result in subrecipients not properly administering the federal programs in accordance with federal regulations.
CAUSE:
ROE management indicated this was due to oversight and staffing limitations.
RECOMMENDATION:
We recommend the ROE establish and implement procedures over subrecipient monitoring.
MANAGEMENT’S RESPONSE:
The ROE agrees with this finding. The ROE did communicate federal award information to all subrecipients but failed to get the signature of Regional Office of Education No. 17 documenting their decline of the federal award and preference for ROE to manage the funds and services for their area.