VICTORIA COUNTY

Criteria or specific requirement: Per 2 CFR 200.303(a), the County must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the ”Standards for Internal Control in the Federal Government” issued by the Comptroller General of the Untied States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Under Uniform Grant Guidance, the County must: • Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain required information including but not limited to: Federal and subaward information, indirect cost rate, and the subrecipient’s unique entity identifier (UEI). (2 CFR 200.332 (b)) • Evaluate each subrecipient’s fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring. (2 CFR 200.332 (c)) • Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. (2 CFR 200.332 (e)) • Verify that a subrecipient is audited as required by 2 CFR 200.501. (2 CFR 200.332 (g))Condition: Subaward agreement was expired and did not include all required information, nor did the subrecipient have the required UEI. Subaward requirements were not communicated to the subrecipient; therefore, monitoring activities were not effective. Documentation of subrecipient risk assessment or audit verification not available for audit.Questioned Costs: None noted.Context: Audit procedures included testing of the one subrecipient who received a subaward during the year. There were no other subrecipients.Cause: The County’s procedures were not sufficient to ensure the subawards were issued or monitored in compliance with Federal requirements. Internal controls did not prevent or detect the errors.Effect: Failure to properly document required contract information, perform the necessary risk assessments, and document the review of the subrecipient’s single audit may result in noncompliance with grant terms and conditions. Subrecipients may have incomplete Schedules of Expenditures of Federal Awards, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance.