Finding Text
Finding 2022-004 Reporting and Subrecipient Monitoring
Federal Program: Coronavirus State and Local Fiscal Recovery Funds [AL #21.027]
Criteria: Per CFR 200.331 “a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor.”
Condition: When submitting required quarterly reports, the County improperly identified two entities as being subrecipients instead of contractors.
Cause: The reporting guidance was not clear on the definition of subrecipient vs contractor and therefore resulted in a misunderstanding.
Effect: The two entities could potentially be identified as subrecipients and therefore subject to single audit when they should not be.
Questioned Costs: None identified.
Context: Those responsible for the Federal awards did not have a clear understanding of the difference between subrecipient and contractor.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend the County review the requirements for determining whether a disbursement qualifies as a payment to a subrecipient or a contractor and ensure all those that administer Federal funding have an understanding of the terms. Additionally, we recommend the County ensure they are aware of all compliance requirements surrounding subrecipient monitoring.
Views of Responsible Officials and Planned Corrective Action: The guidance was unclear when reporting began in 2021. The delineation is now understood and will be corrected in the next quarterly report to the Treasury Department.