3.19 Audit Requirements
Audit of Subrecipients
When subawards are made by the direct recipient to another organization or organizations, the direct recipient is responsible for making sure that subrecipients comply with the audit requirements set forth in this chapter.
- It is the direct recipient’s responsibility to ensure that subrecipient audit reports are received and that all audit findings have been resolved.
- The subrecipient must convey to the direct recipient any known or suspected violations of law encountered during audits, including fraud, theft, embezzlement, forgery, or other serious irregularities.
If a subrecipient is not required to have an audit as stipulated in OMB Circular A-133, the direct recipient is still responsible for monitoring the subrecipient’s activities to provide reasonable assurance that the subrecipient administers Federal awards in compliance with Federal requirements.