Finding Text
Identification of the Federal Program - Community Programs to Improve Minority Health Grant Program- Assistance Listing Number 93.137 Criteria - Per 2 CFR 200.332, Requirements for Pass-Through Entities, the City is required to monitor the subrecipients activities to ensure that the grant funds are used for authorized purposes by reviewing financial and performance reports that were required by the City. The City was also required by 2 CFR 200.332 to verify that each of their subrecipients had a single audit performed if their federal expenditures exceeded $750,000. In the Notice of Award, the Department of Health and Human Services required the City to create and provide to the Department a subrecipient monitoring plan as well as use that plan to monitor each of the City’s subrecipients. In the subrecipient monitoring plan, the City was required to perform the following steps:
•Regularly communicate at least once a month with subrecipients to ensure that the project is beingcarried out as proposed and according to schedule.
•Review and approve periodic technical/performance reports.
•Review and approve subrecipient invoices.
•Monitor general rate of expenditures and implementation of activities.
•Review each subrecipient monthly through the subrecipients preparation of the City’s SubrecipientDesk Review form.
•Perform an annual review for each subrecipient through the preparation of the Annual SubrecipientField Review form using the monthly desk review forms.
2 CFR 200.303, Internal Controls, requires that recipients establish and maintain effective internal control over Federal awards that provides reasonable assurance that the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards.
Condition - There was a lack of subrecipient monitoring and appropriate review by the City. The City did not effectively monitor subrecipient activities to ensure the proper utilization of grant funds. There was a lack of documented evidence demonstrating the monitoring of subrecipients.
The City also failed to verify whether each of their subrecipients met the threshold of $750,000 in federal expenditures and subsequently underwent a single audit. There is no documented evidence indicating that the City systematically reviewed the subrecipient expenditures to ensure compliance with this requirement.
Effect - Without proper documentation and monitoring, there is an increased likelihood of financial mismanagement, misuse of funds, and noncompliance with grant terms and regulations. Additionally, the absence of adequate records impedes transparency and accountability in the use of federal funds. This deficiency also may result in undetected instances of subrecipients failing to undergo required single audits.
Cause - The absence of robust monitoring procedures may stem from insufficient staff training on federal grant requirements, a lack of awareness regarding the importance of maintaining accurate records and conducting thorough monitoring of subrecipient activities, a lack of established processes for reviewing financial and performance reports, or inadequate internal controls. Additionally, there may be a lack of clear communication and accountability regarding subrecipient monitoring roles and responsibilities.
Recommendation - The City should establish and enforce comprehensive subrecipient monitoring protocols. This includes developing standardized monitoring procedures, providing staff training on monitoring requirements, allocating sufficient resources for monitoring activities, and implementing mechanisms for regular review and documentation of monitoring efforts. By strengthening subrecipient monitoring practices, the City can mitigate risks, ensure compliance with grant requirements, and safeguard the effective utilization of grant funds.
Views of Responsible Officials - The City agrees with the finding. The City will implement additional subrecipient monitoring procedures.