Finding Text
2023-006 – Subrecipient Monitoring – Internal Control and Compliance over Subrecipient Monitoring (Significant Deficiency)
Identification of the Federal Program:
Assistance Listing Number: 21.027
Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds
Federal Agency: Department of Treasury
Pass-Through Entity: N/A
Federal Award Number and Award Year: N/A
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):
C.F.R. § 200.332 prescribes that the pass-through entity must conduct monitoring activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include:
1. Reviewing financial and performance reports required by the pass-through entity.
2. 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.
3. 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 § 200.521.
4. The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings.
Condition:
During our audit, we noted that the City did not have established monitoring policies and procedures for its subrecipients to address the compliance requirements. Consequently, no subrecipient monitoring activities were conducted during the year.
Cause:
The City does not have any written policy and sufficient procedures for subrecipient monitoring activities tailored to address the subrecipient monitoring compliance requirements of the grant.
Effect or Potential Effect:
The City was not able to do the necessary subrecipient monitoring activities resulted to internal control and compliance requirement finding.
Questioned Costs:
None.
Context:
See condition above for context of the finding.
Identification as a Repeat Finding, If Applicable:
Not applicable.
Recommendation:
We recommended the City establish a formal policy over review procedures on subrecipient monitoring to ensure the City is in compliance the grant requirement.
Views of Responsible Officials:
Management concurs the finding.