Finding Text
U.S. DEPARTMENT OF TREASURY: 2022-023 Compliance with Subrecipient Monitoring Fiscal year finding initially occurred: 2021 Emergency Rental Assistance Program (21.023) Criteria An effective system of internal controls contemplates that management properly review and assess the subrecipient through monitoring procedures and documents the results of the procedures performed. This includes ensuring the subrecipient is following all direct and material compliance requirements applicable to each federal program. Condition During the current fiscal year, the Government performed one monitoring visit to each of the subrecipients. In this visit they tested 48 case files and reviewed them for compliance with record keeping and eligibility requirements. They identified 2 deficiencies in one of the subrecipients? case files. Which were corrected before they completed their visit. The other subrecipient had three deficiencies that were not corrected before the visit was completed. In addition, there was no follow-up by management on these deficiencies and as of 4/14/23, they have not performed a subsequent site visit. Cause The City does not have sufficient procedures in place to perform subrecipient monitoring in a timely manner and to follow-up on identified deficiencies. Effect The subrecipient could provide federal funds to ineligible individuals resulting in questioned costs that could go undetected. Recommendation We recommend the Government develop a formal policy in relation to subrecipient monitoring including the review procedures to be performed, the timing, frequency of the monitoring(s) and follow-up procedures. The Government should formally document their risk assessment of the subrecipient to support the nature, timing, and extent of testing of the subrecipient. Views of Responsible Officials and Planned Corrective Action The Government originally received this finding in 2021 to which the response was it would monitor subrecipients no less than once per fiscal year in which the awardee received funding or otherwise as required by Federal regulation for individual grants. The Government has met that requirement. In order to further improve upon monitoring practices, the Government will perform follow-up monitoring reviews within 3 months, as applicable by program type, of finding deficiencies in the subrecipients? programs to ensure corrective active has taken place. The Government will also consider the subaward amount as part of the risk assessment when contracting with each subrecipient; higher risk subrecipient programs will be monitored at a more frequent interval. This project is expected to be completed within six months and will be overseen by the Community Development & Planning Director Mary Sliman.