Finding Text
2023-001 Subrecipient Monitoring
Cluster: Research and Development Cluster
Grantor: Department of Health and Human Services and National Aeronautics and Space Administration
Award Names: Biomedical Research and Research Training and Science
Award Year: July 1, 2022 – June 30, 2023
Award Number: 5R01GM140457-03 and 80NSSC21K0753
Assistance Listing Numbers: 93.859 and 43.001
Pass-through entity: Not applicable
Criteria
2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include:
• Reviewing financial and performance reports required by the pass-through entity.
• Following-up and ensuring that 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 written confirmation from the subrecipient,
highlighting the status of actions planned or taken to address Single Audit findings related to the
particular subaward.
• Issuing a management decision for applicable audit findings pertaining only to the Federal award
provided to the subrecipient from the pass-through entity as required by 2 CFR 200.521.
2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as
required by the Uniform Guidance 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.
Additionally, 2 CFR 200.332(b) indicates that entities must evaluate each subrecipient's risk of
noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for
purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of
this section of the guidance. In this respect, the College procedures include (amongst other items)
obtaining a Commitment Form from the subrecipient, performing an initial risk assessment on all
subrecipients, and updating that risk assessment based on the Controller Office’s judgement. The
College also annually reviews the subrecipient's Uniform Guidance (“UG”) report and performs any
necessary follow-up to issue a management decision, where applicable.
Condition
Through our testing of 4 subrecipients, we noted the following:
• For all samples, we were unable to obtain sufficient evidence of the College’s annual subrecipient
risk assessment.
• For all samples, we were unable to obtain sufficient evidence of the College’s annual review of
the audited financial statements and UG report, documentation of their review of the
subrecipient’s audit report, and actions taken as a result of the findings in the report.
Cause
The College indicated subrecipient reviews, including the annual risk assessment and review of the UG
report, were performed informally by the Principal Investigators and financial staff and not consistently
documented. The College cites insufficient staffing needed for the formal documentation of the
subrecipient risk assessment and monitoring procedures as the cause.
Effect
The lack of an annual review of subrecipient UG reports may result in potential compliance issues not
being identified and management not addressing findings and issuing a management decision, as
required under the UG. In addition, the lack of review of the risk assessment form may result in missing
information not being identified.
Questioned Costs
None identified.
Recommendation
We recommend the College reassess the design of its controls around subrecipient risk assessment and
monitoring during the ongoing monitoring process. The College should formalize the documentation and
review of its controls related to the annual monitoring of subrecipients, inclusive of annual reviews of
Uniform Guidance reports along with other required ongoing monitoring based on the risk rating of the
subrecipient.
Management’s Views and Corrective Action Plan
Management’s Views and Corrective Action Plan are included at the end of this report after the
summary schedule of prior audit findings.