Finding Text
Finding Number: 2023-002 – Subrecipient Monitoring
Evaluation of Finding:
Material Weakness/Noncompliance
Federal Program: Community Services Block Grant
Federal Assistance No.: 93.569
Title: CSBG-CV
Federal Grantor: U.S. Department of Health and Human Services
Pass-Through Entity: State of California, Health and Human Services Agency
Grant number: 20F-3684
Criteria or specified requirement:
2 CFR sections 200.332 requires that pass-through entities evaluate each subrecipients risk of noncompliance with federal awards and monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes in compliance with the conditions of the subaward; and that subaward performance goals are achieved, at the time of sub-award.
Condition:
The Authority has procedures in place to comply with certain subrecipient monitoring requirements, however, the procedures did not include all requirements under 2 CFR sections 200.332 until March of 2023. The Authority is required to evaluate risk, monitor the activities of the subrecipient and ensure accountability of subrecipients, prior to, and at the time of, sub-awards. The primary activity performed by the Authority prior to March 2023, was the review of reimbursement request details to ensure that the subrecipient’s expenditures were eligible under the federal program. From March 2023 through June 2023, the Authority was following a newly implemented subrecipient monitoring policy.
Cause:
The Authority did not have a subrecipient monitoring policy in place for at the time of sub-award until March 2023.
Effect:
The subrecipients were not sufficiently monitored as required under Uniform Guidance for the full fiscal year.
Questioned Costs:
None
Context:
The Authority’s policy did not include all of the required monitoring activities resulting in a systemic deficiency in subrecipient monitoring, until a new policy was implemented in March 2023.
Recommendation:
We recommend that the Authority continue following their newly established policy to include all subrecipient monitoring activities and consider including alternative procedures for onsite reviews when in person monitoring cannot take place. Additionally, we recommend this policy is reviewed on an annual basis for potential amendments, as a best practice.
Management Response and Corrective Action:
We are in agreement with the finding. These were discovered during the 2022 CSD desk audit and as a result, a revised subrecipient monitoring policies and procedures manual was drafted. In addition, the following actions were also taken:
1. The Subrecipient Monitoring policy and procedures were updated in August 2022 to include the procedures for evaluating risk for subrecipients and revise monitoring procedures. These procedures were updated to include checking the Federal Awards clearinghouse annually to assess audit requirements for all subrecipients and ensure the monitoring policy includes procedures when those audits result in any concerns or findings for subrecipients. A revised risk assessment is conducted for each subrecipient.
As stated in the finding, a new subrecipient monitoring policy was implemented in March 2023 and staff has following this policy since that time and will continue to do so.