Finding Text
Federal Agency: Department of Health and Human Services
Federal Program: 93.137 Community Programs to Improve Minority Health Grant Program
Identification Number: 1 CPIMP211296-01-00
Requirement: Subrecipient Monitoring
Type of Finding: Material weakness in internal control over major program; Noncompliance
Criteria: A pass-through entity’s subrecipient monitoring policies and procedures should provide information about the entity’s process to identify subawards, evaluate risk of noncompliance and perform monitoring procedures based upon identified risks.
Condition: Program management does not have knowledge of the process used to select subrecipients. Monitoring procedures performed were not documented and reports submitted by the subrecipients were not reviewed.
Cause: The program has had significant employee turnover and there was a lack of documentation of these policies and procedures.
Effect: Selecting subrecipients without a formal evaluation process and performing minimal monitoring procedures increases the risk of noncompliance for the City and could lead to a loss of funding if the subrecipients are deemed noncompliant.
Context: The City selected two subrecipients to pass federal funding onto. There was no knowledge or documentation as to how the subrecipients were chosen or how the subaward agreements were developed. The City did hold progress meetings with subrecipients, but there were no minutes taken or any documentation maintained related to these meetings. Financial reports submitted by the subrecipients to program management were not reviewed to ensure grant funds were utilized for allowable activities and costs.
Recommendation: Program management should develop standardized procedures for selecting and granting subawards. These procedures should be formalized and maintained for future reference. Brief minutes of progress meetings should be taken to show that monitoring is taking place. All reporting by the subrecipient should be reviewed by management of the program.
Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.