Finding Text
U.S. Department of Treasury
Passed-through the Colorado Department of Local Affairs
FFAL #21.027
COVID-19 Coronavirus State and Local Fiscal Recovery Funds
Subrecipient Monitoring
Material Noncompliance
Material Weakness in Internal Controls
Criteria: Section 2 CFR 200.331 establishes the determination of whether there is a subrecipient
or contractor of the federal award. The non-Federal entity may concurrently receive Federal
awards as a recipient, a subrecipient, and a contractor, depending on the substance of its
agreements with Federal awarding agencies and pass-through entities. Therefore, a passthrough
entity must make case-by-case determinations whether each agreement it makes for
the disbursement of Federal program funds casts the party receiving the funds in the role of a
subrecipient or a contractor. The Federal awarding agency may supply and require recipients to
comply with additional guidance to support these determinations provided such guidance does
not conflict with this section. Once it is determined the recipient is a sub-recipient there are
certain requirements for pass-through entities established in 2 CFR 200.332.
Per 2 CFR 200.332, pass-through entities are responsible for informing subrecipients of the
Federal award identifiers including but not limited to award date, period of performance and
Federal awarding agency and Assistance Listing Number and title. Pass-through entities are
required to assess the subrecipient’s risk of noncompliance with Federal statutes, regulations
and the terms and conditions of the subaward. Further, the pass-through entity is required to
perform certain monitoring activities to ensure 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. Finally, the pass-through entity should also
verify the subrecipient is audited as required by Subpart F - Audit Requirement under the
Uniform Guidance. The monitoring policy should include an initial valuation of risk of
noncompliance to determine the appropriate level of monitoring required related to the
subaward as well as appropriate awarding documentation.
Condition: The County did not appropriately identify two subrecipients of the grant and initially
determined them to be contractors. The County failed to perform any subrecipient monitoring
as required by the Uniform Guidance.
Cause: Due to the County’s failure to understand the sub-recipient monitoring requirements,
two of subawards were incorrectly identified as contractors and none of the required award and
monitoring procedures were performed for the four subrecipients of the grant.
Effect: Insufficient procedures and internal controls related to subrecipients resulted in
noncompliance.
Questioned Costs: No questioned costs were identified as a result of our procedures.
16
Summit County, Colorado
Schedule of Findings and Questioned Costs
Year Ended December 31, 2023
Context/Sampling: All four subrecipients were selected for subrecipient monitoring testing.
Repeat Finding from Prior Years: No.
Recommendation: We recommend that the County establish and adhere to policies and
procedures, including internal controls, to ensure compliance with subrecipient monitoring
requirements as established by 2 CFR 200.331 and 2 CFR 200.332.
Views of Responsible Officials: Management agrees with the finding.