Institute for International Law and Human RightsNon-Profit

Criteria: Under the Uniform Guidance, subrecipients should be monitored closely throughout the life of the project (or term of the award agreement), and requests for disbursements made on a timely basis. The Institute should review its monitoring process for its subrecipients, and ensure follow-up procedures are in place to oversee timely submission of disbursement requests. Additionally, the Institute should review the reporting from the subrecipients and disbursements to the subrecipients on a quarterly basis in order to be in compliance with the federal award agreements, and to reduce and eliminate audit adjustments. Condition: During our subsequent disbursement testing, we noted two instances of subrecipient disbursement requests that covered a period longer than one quarter, including one request that was submitted seven months after the quarterly period ended. Questioned Costs: None. Context: Upon review of subsequent disbursements, we noted that the Institute?s subrecipients had not been reporting their activities and disbursement requests timely to the Institute on a quarterly basis. Two instances of delayed reporting and requests were noted. One instance covered a period of nine months and was submitted to the Institute seven months after the period ended. Another instance covered a full 12-month period. The subrecipient award terms state that the subrecipients are required to submit reconciliations to the Institute on a quarterly basis. No reconciliation or reporting period would exceed one quarter (three months) under these terms. Effect: An audit adjustment was necessary to accrue the federal expenditures that were incurred during the fiscal year under audit in the aggregate amount of $166,145. Additionally, another audit adjustment was necessary to properly record the federal revenue and receivable associated with the disbursement of the funds to the subrecipients at year end in the amount of $166,145. These adjustments resulted in material revisions to the financial statements many months after the fiscal period ended. Cause: The Institute did not review appropriate monitoring procedures over the subrecipients to ensure timely reporting of the quarterly reconciliations and requests for disbursement. Management had not established or communicated the importance of the timely reporting to the subrecipients, and did not comply with the subrecipient award agreements, including timely financial reporting of the subrecipient disbursements in its financial records. Identification as a Repeat Finding: No. The Institute did not receive an audit under the Uniform Guidance for the year ended May 31, 2020. Recommendation: We recommend that the Institute ensure follow-up procedures are in place to oversee timely submission of disbursement requests. The process should include required quarterly reporting to be in compliance with the subrecipient award agreements, and be integrated with the financial reporting process to ensure reported amounts are recorded in the proper fiscal period on a timely basis. This will ensure more accurate financial reporting and compliance with the federal award agreements. Views of Responsible Officials and Planned Corrective Action: See Corrective Action Plan.