Finding Text
2023-001: Workforce Investment Opportunity Cluster – Assistance Listing #17.258 / 17.259 / 17.277 / 17.278, Subrecipient Monitoring
Condition:
During our review of subrecipient monitoring, we noted that the City’s monitoring was not being performed according to the formal written policy. While monitoring was performed and documented during the second half of fiscal year 2023, there was a lack of evidence of testing and suggestions to the subrecipient during the first half of fiscal year 2023.
Criteria:
According to 2CFR 200.331(a) of the OMB Compliance Supplement, the City should make subrecipients aware of award information. According to the City’s Program Participant Monitoring Plan, the City is supposed to conduct subrecipient monitoring on a semi-annual basis which should include desk reviews of payroll, disbursements, and other financial items.
Cause:
Staff turnover, particularly for the role of grant accountant, caused these procedures to be overlooked. Management prioritized core operating activities with staffing vacancies in lieu of monitoring activities. Management asserts staff went onsite to review key documents, as documented by email activities, but did not document specific items subject to review.
Effect:
Noncompliance with federal grant requirements with regard to subrecipient monitoring, as well as an increased risk of subrecipient misusing funds.
Questioned Cost Amount:
Not applicable.
Perspective Information:
One out of two subawards.
Recommendation:
We recommend performing subrecipient monitoring in accordance with the City’s guidelines and following the procedures laid out in the Program Participant Monitoring Plan.
View of Responsible Officials and Planned Corrective Action:
Management concurs with the recommendation and will ensure that follow-up occurs regarding information provided by business owners. Loss of staff in this accountability area resulted in an inquiry and reviews conducted by varying personnel the past few fiscal years. The Accounting Supervisor and the Accounts Payable Co-coordinator, in the absence of a Grant Accountant, conducted the first semi-annual visit for fiscal year 2023. A grant accountant was hired in the Spring 2023 along with an Accounting Manager, who were able to conduct the second visit in June 2023. Revisions to the policies and procedures were made following the June visit along with developing formalized documentation templates that show what was subject to monitoring. Fiscal year 2024 monitoring in January 2024 has been completed with follow-up to occur in June 2024.