How do COs/AOs monitor subrecipients to ensure proper use of funds?

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Ongoing, planned oversight is essential for ensuring subrecipients use funds properly. An approved monitoring plan lays out how often you review activities, what you check (allowable costs, compliance with program requirements, financial and performance reporting), and how you handle findings. Regularly reviewing subrecipient audit reports and ensuring any findings are addressed with corrective action plans helps verify that major programs are operating correctly and that issues don’t go unresolved. Verifying pass-through funds compliance means confirming that costs charged are eligible and allocable, terms of the award are followed, and reporting requirements are met. This monitoring approach is proactive and risk-based: higher-risk subrecipients get more intensive oversight, while still maintaining checks for all. It focuses on preventing misuse and correcting problems early, rather than relying on self-reporting, waiting for a single end-of-project audit, or pulling funding after the initial disbursement without follow-through.