Subrecipient Monitoring (Course Id 2148)

Auditing (Governmental) - Auditing (Governmental) for Course Id 2148

Grant money comes with plenty of strings attached! One string involves subrecipient monitoring. If your auditee receives grant monies but then passes some or all of the money on to other organizations (called subrecipients) the auditee still has an obligation to make sure that the money is being used as intended.

Federal grant regulations have always required grantees that make subawards to monitor subrecipients. However, when the Office of Management and Budget issued the Uniform Guidance, they strongly emphasized the need for subrecipient monitoring and added a few important requirements.

This text is intended help you understand subrecipient monitoring requirements and provide tools and techniques to help you meet your obligations to the grantor.

NASBA QAS - Text - NASBA Registry - 2148

Course Learning Objectives

• Identify the regulations that apply to subrecipient monitoring by pass-through entities included in the Uniform Administrative Requirements applicable to state and local governments and nonprofit organizations
• Identify key government regulators and their function
• Recognize the UGG requirements for conducting risk assessments of subrecipients
• Identify the requirements for monitoring subrecipients
• Cite additional considerations when conducting risk assessments of subrecipients
• Distinguish between inherent risk, control risk and detection risk
• Recall the elements of the fraud triangle
• Recognize the elements of a three-tier monitoring plan
• Identify the need for documentation of monitoring
• Cite when the grantor organization needs to be informed about subrecipient issues
• Identify the elements in reviewing a subrecipient’s Single Audit Report
• Identify the factors to consider when resolving the findings in a subrecipient’s Single Audit Report
• Recall the components of an internal control system
• Recognize tools and guides provided by the AGA for monitoring subrecipients

Chapter 1
The Uniform Grant Guidance - General Principles & Basic Premises

• Identify the regulations that apply to subrecipient monitoring by pass-through entities included in the Uniform Administrative Requirements applicable to state and local governments and nonprofit organizations
• Identify key government regulators and their function

Chapter 2
Risk Assessment and Monitoring

• Recognize the UGG requirements for conducting risk assessments of subrecipients
• Identify the requirements for monitoring subrecipients

Chapter 3
Additional Expectations for Risk Assessments

• Cite additional considerations when conducting risk assessments of subrecipients
• Distinguish between inherent risk, control risk and detection risk

Chapter 4
The Consideration of Fraud: The Fraud Triangle

• Recall the elements of the fraud triangle

Chapter 5
Have a Monitoring Plan for Each Recipient

• Recognize the elements of a three-tier monitoring plan
• Identify the need for documentation of monitoring

Chapter 6
Follow Up on All Identified Problems

• Cite when the grantor organization needs to be informed about subrecipient issues

Chapter 7
The Single Audit

• Identify the elements in reviewing a subrecipient’s Single Audit Report
• Identify the factors to consider when resolving the findings in a subrecipient’s Single Audit Report

Chapter 8
Internal Control Standards

• Recall the components of an internal control system

Chapter 9
Tools You Can Use

• Recognize tools and guides provided by the AGA for monitoring subrecipients

Chapter 1: The Uniform Grant Guidance – General Principles & Basic Premises

1-1 Inclusion of 2 CFR 200 Sections

1-2 Definitions Pertinent to Federal Administrative Requirements Regarding Subrecipient Monitoring

1-3 Differentiating Contracts from Subrecipient Agreements

1-3-1 OMB Tries to Write Clearly and Succinctly

1-3-2 The UGG Lists Five Factors That Indicate a Subrecipient Agreement

1-3-3 The UGG Also Provides Five Factors That Indicate a Contract

1-3-4 The Complete UGG Sections 200.330 and 200.331

Chapter 1 Summary

Review Questions for Chapter 1

Chapter 2: Risk Assessment and Monitoring

2-1 Risk Assessments

2-2 Subrecipient Monitoring Requirements

2-2-1 Pass-Through Entities Must Verify That Subrecipients Obtain Single Audits When Required

2-2-2 Subrecipient Monitoring Must Include Specific Activities

2-2-3 Ensure That the Subrecipient Takes Prompt Corrective Action

2-2-4 Ensure That Subrecipients Take Action on All Deficiencies

2-3 Other Techniques That Pass-Through Entities May Find Useful

2-3-1 Training Subrecipients

2-3-2 Conducting Site Reviews

2-3-3 Process for Conducting Site Reviews

2-3-4 Arranging for an Agreed-Upon Procedures Engagement

2-4 Other Monitoring Requirements

2-4-1 Consider Whether the Pass-Through Entity Should Adjust Its Own Records

2-4-2 Consider Enforcement Actions Against Noncompliant Subrecipients

2-4-3 Conduct Necessary Monitoring of For-Profit Subrecipients

Chapter 2 Summary

Review Questions for Chapter 2

Chapter 3: Additional Expectations for Risk Assessments

3-1 Considering the Risks to Your Organization

3-2 Programmatic Risk Is Almost Always More Significant Than Financial Risk

3-3 Always Consider the Risk of Fraud

3-3-1 Fraud Is Significant

3-3-2 Testing for Fraud

3-4 Think About Risk the Way an Auditor Does

3-4-1 Inherent Risk

3-4-2 Control Risk

3-4-3 Detection Risk

3-5 Addressing the Various Risks

3-6 Deciding Which Risks to Address

3-7 One Way to Evaluate Risk

Chapter 3 Summary

Review Questions for Chapter 3

Chapter 4: The Consideration of Fraud: The Fraud Triangle

4-1 Incentives or Pressures

4-2 Opportunities

4-3 Ability to Rationalize

Chapter 4 Summary

Review Question for Chapter 4

Chapter 5: Have a Monitoring Plan for Each Recipient

5-1 Use the Risk Assessment to Develop a Monitoring Plan

5-1-1 Consider a Three-Tier Plan

5-1-2 You May Need to Adjust the Plan if the Situation Changes

5-2 Document the Monitoring Activity

5-2-1 Document Specific Actions

5-2-2 Document Issues You Plan to Raise with the Subrecipient

5-2-3 Document All Recommendations

Chapter 5 Summary Review Questions for Chapter 5

Chapter 6: Follow Up on All Identified Problems

6-1 Deal with Any Financial Implications

6-2 Determine Whether You Need to Notify the Grantor of Problems

6-3 Do the Issues You Identified Indicate Any Other Problems?

Chapter 6 Summary

Review Question for Chapter 6

Chapter 7: The Single Audit

7-1 What Is a Single Audit?

7-2 Pass-Through Entities Must Review Subrecipients Single Audits

7-3 Considering the Auditor’s Opinion

7-4 Reviewing Single Audit findings

7-5 Resolving Audit Findings

7-6 Additional Considerations in Financial Liability

Chapter 7 Summary

Review Question for Chapter 7

Chapter 8: Internal Control Standards

8-1 Reasonable Assurance

8-2 Internal Control Standards

8-3 Structure of the Green Book

8-4 Control Environment

8-5 Risk Assessment

8-6 Control Activities

8-7 Information and Communication

8-8 Monitoring

8-9 Implications of an Internal Control Assessment

Chapter 8 Summary

Review Question for Chapter 8

Chapter 9: Tools You Can Use

9-1 Be Sure That You Know the Rules

9-2 Add to Your Network

9-3 AGA Subrecipient Monitoring and Self-Assessment Guide

9-3-1 Use of the Subrecipient Monitoring Guide

9-3-2 Topics Covered by the Guide

9-4 AGA’s Risk Assessment Monitoring Tool

9-5 AGA’s Subrecipient vs. Contractor Checklist

9-6 You Can Access Many Other Tools on the Internet

Review Question for Chapter 9

Attachment

Glossary