Office of Special Education Programs (OSEP) 

Fiscal Monitoring Instrument (FMI): FFY 2016

Arizona Department of Education (ADE) 

Please note the following abbreviations are used in the Fiscal Monitoring Instrument (FMI): 

FFY – Federal fiscal year 

IDEA – Individuals with Disabilities Education Act 

LEA – local educational agency 

MFS – maintenance of State financial support 

OMB – Office of Management and Budget 

OIG – Office of the Inspector General 

SEA – State educational agency 

Uniform Guidance – Uniform Administrative Requirements, Cost Principles and Audit 

Requirements for Federal Awards codified in 2 CFR Part 200 

SCOPE OF MONITORING:

OSEP’s 2017 Fiscal Monitoring examined the status of ADE’s corrections of noncompliance 

involving: 1) LEA Allocations, and 2) Subrecipient Monitoring. In conducting the monitoring, 

OSEP reviewed information from FFYs 2014, 2015 and 2016, including State-submitted 

documentation and other available information; audits conducted under the Uniform Guidance 

and those conducted through the Department’s Office of Inspector General (OIG). OSEP 

conducted both on-site and telephone interviews with State staff. 

The LEA Allocations topic is addressed in a separate enclosure. This FMI addresses the 

Subrecipient Monitoring topic. 
Arizona Department of Education (ADE), page 2 of 3 

IDEA PART B 

SUMMARY OF MONITORING CRITERIA

Monitoring Area 2, IDEA Part B: Subrecipient Monitoring 

Under the IDEA and Uniform Guidance, SEAs are responsible for oversight of the operations of IDEA supported activities. Each 

SEA must monitor its own activities, and those of its LEAs, to ensure compliance with applicable Federal requirements and that 

performance expectations are being achieved. Monitoring must cover each program, function, or activity. Subrecipient monitoring is 

at the core of the SEA’s general supervisory responsibilities, and can help the SEA ensure that its LEAs are in compliance with IDEA 

and related requirements, as well as aligned with SEA priorities designed to improve results for children with disabilities. The focus 

of this activity was to review the State’s fiscal subrecipient monitoring.

Criterion Number Description 

Noncompliance 

identified? 

Applicable 

Requirement 

Criterion 2.1 The SEA ensures that every subaward is clearly identified 

to the subrecipient as a subaward and includes required

information at the time of the subaward. If any of the data 

elements change, the SEA includes the changes in 

subsequent subaward modification. 

Yes 2 CFR §200.331(a) 

Criterion 2.2 The SEA evaluates each subrecipient’s risk of 

noncompliance with Federal statutes, regulations, and the 

terms and conditions of the subaward for purposes of 

determining the appropriate subrecipient monitoring.

No 2 CFR §200.331(b)

Criterion 2.3 The SEA monitors the activities of the subrecipient as 

necessary to ensure that the subaward is used for 

authorized purposes, in compliance with Federal statutes, 

regulations, and the terms and conditions of the subaward; 

and that subaward performance goals are achieved.

No 2 CFR §200.331(d), 

34 CFR §§300.149 

and 300.600
Arizona Department of Education (ADE), page 3 of 3 

Criterion Number Description 

Noncompliance 

identified? 

Applicable 

Requirement 

Criterion 2.4 Depending upon the assessment of risk posed by the 

subrecipient, the SEA has policies and procedures that 

consider monitoring activities of LEAs ranging from

technical assistance to on-site monitoring or conducting 

agreed-upon-procedures engagements (audits).

No 2 CFR §200.331(e)

Criterion 2.5 The SEA conducts monitoring activities that verify that 

every subrecipient is audited in accordance with the 

Uniform Guidance.

No 2 CFR §200.331(f)

Criterion 2.6 The SEA considers enforcement actions against 

noncompliant subrecipients as required under the Uniform 

Guidance and IDEA. 

No 2 CFR §§200.338

and 200.331(h); 

34 CFR §§300.149, 

300.222, 300.600, 

and 300.604.

Finding: 

Criterion 2.1: Based on the review of documents and interviews with ADE staff on September 14, 2017, ADE does not ensure that 

each IDEA section 611 and section 619 subaward is clearly identified to the subrecipient as a subaward and includes the required 

information at the time of the subaward as specified in 2 CFR §200.331(a). OSEP made requests to review ADE’s notifications to 

subrecipients to ensure their consistency with 2 CFR §200.331(a). ADE did not provide the requested documentation. 

Citation: 

As a pass-through entity, ADE must, under 2 CFR §200.331(a), ensure that every subaward is clearly identified to the subrecipient 

as a subaward and includes the information specified in §200.331(a)(1)(i)-(xiii) at the time of the subaward, and if any of these data 

elements change, include the changes in subsequent subaward modification. There are 13 required items that must be included in 

the Federal subaward notification. 

Further Action Required: 

Within 90 days of receipt of this letter, the State must submit to OSEP documentation demonstrating that section 611and 619 

subaward notifications include the information as required by 2 CFR §200.331(a).