7.2 - Potential Audit Findings and Their Effect

Prime recipients should be aware of the kinds of findings they may receive from an auditor if they do not have an adequate subrecipient monitoring system. If, for example, a prime recipient’s monitoring system is not sufficient to ensure a subrecipient’s compliance with the subaward and applicable laws and regulations, an audit would note a significant deficiency. The auditor also might report a material weakness if the prime recipient’s internal controls over subrecipient monitoring for a program do not reduce the risk that noncompliance with applicable federal and program requirements may occur without detection (§200.516(a)). In addition, the auditor would consider… Read More