Audit 29399

Federal Program: U.S. Department of Commerce, Regional Fishery Management Councils CFDA 11.441 Criteria: WPRFMC should minimize the time between the drawdown of Federal funds from the Federal government and their disbursement for Federal program purposes pursuant to 2 CFR 200.305(b). The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements for direct program or project costs. In accordance with the Department of Commerce Financial Assistance Standard Terms and Conditions dated November 2020, B.02(b)(1), advance payment requests should be timed such that Federal funds are on hand for a maximum of thirty calendar days before being disbursed. Condition: During our audit, we noted draw downs from the Sustainable Fisheries Fund XII award were on hand in excess of thirty days during the periods April through July 2022 and October through December 2022. Funds from the Sustainable Fisheries Fund XIII award were on hand in excess of thirty days from September through December 2022. The excess funds on hand for these awards ranged from approximately $4,000 to $16,000. Cause: Internal controls over cash management were inadequate to ensure Federal draws did not exceed related expenditures. The untimely reconciliation of award expenditures could have resulted in improper drawdowns of Federal funds. Effect or Potential Effect: Inadequate controls over cash management increases the risk of noncompliance with Federal cash management requirements and with other Federal statutes and regulations related to financial management. Recommendation: We recommend WPRFMC enhance internal controls over cash management to minimize the time elapsing between the drawdown of Federal funds and the related disbursement.

Finding #2022-001: Reporting Federal Program: U.S. Department of Commerce, Regional Fishery Management Councils CFDA 11.441 Criteria: WPRFMC is required to submit Form SF-425 (Federal Financial Report) for each of its federal awards on a semi-annual basis for the periods ending March 31 and September 30. These reports are due no later than 30 calendar days following the end of each reporting period. Internal controls should provide for these reports to contain accurate, current, and complete financial results (2 CFR ?200.302(b)(2)). Condition: For 8 of 12 semi-annual Federal Financial Reports tested, the reported cash disbursements did not reconcile to the expenditures recorded in the general ledger. Unreconciled differences ranged from $30 to $104,174 and totaled approximately $199,000. Cause: Internal controls over the recording and classification of expenditures in the general ledger were inadequate to permit the accurate reporting of expenditures within the required 30-day period. Effect or Potential Effect: Financial reports provided to the Department of Commerce could be materially misstated. Identification as a Repeat Finding: See Finding #2021-002 included in the Summary Schedule of Prior Audit Findings. Recommendation: We recommend WPRFMC continue to improve the necessary internal controls to ensure expenditures are timely and accurately recorded and classified in the general ledger. These controls should provide for the timely reconciliation of cash disbursements reported on the Federal Financial Reports to expenditures recorded for each federal award in the general ledger.

Federal Program: U.S. Department of Commerce, Regional Fishery Management Councils CFDA 11.441 Criteria: WPRFMC should minimize the time between the drawdown of Federal funds from the Federal government and their disbursement for Federal program purposes pursuant to 2 CFR 200.305(b). The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements for direct program or project costs. In accordance with the Department of Commerce Financial Assistance Standard Terms and Conditions dated November 2020, B.02(b)(1), advance payment requests should be timed such that Federal funds are on hand for a maximum of thirty calendar days before being disbursed. Condition: During our audit, we noted draw downs from the Sustainable Fisheries Fund XII award were on hand in excess of thirty days during the periods April through July 2022 and October through December 2022. Funds from the Sustainable Fisheries Fund XIII award were on hand in excess of thirty days from September through December 2022. The excess funds on hand for these awards ranged from approximately $4,000 to $16,000. Cause: Internal controls over cash management were inadequate to ensure Federal draws did not exceed related expenditures. The untimely reconciliation of award expenditures could have resulted in improper drawdowns of Federal funds. Effect or Potential Effect: Inadequate controls over cash management increases the risk of noncompliance with Federal cash management requirements and with other Federal statutes and regulations related to financial management. Recommendation: We recommend WPRFMC enhance internal controls over cash management to minimize the time elapsing between the drawdown of Federal funds and the related disbursement.

Finding #2022-001: Reporting Federal Program: U.S. Department of Commerce, Regional Fishery Management Councils CFDA 11.441 Criteria: WPRFMC is required to submit Form SF-425 (Federal Financial Report) for each of its federal awards on a semi-annual basis for the periods ending March 31 and September 30. These reports are due no later than 30 calendar days following the end of each reporting period. Internal controls should provide for these reports to contain accurate, current, and complete financial results (2 CFR ?200.302(b)(2)). Condition: For 8 of 12 semi-annual Federal Financial Reports tested, the reported cash disbursements did not reconcile to the expenditures recorded in the general ledger. Unreconciled differences ranged from $30 to $104,174 and totaled approximately $199,000. Cause: Internal controls over the recording and classification of expenditures in the general ledger were inadequate to permit the accurate reporting of expenditures within the required 30-day period. Effect or Potential Effect: Financial reports provided to the Department of Commerce could be materially misstated. Identification as a Repeat Finding: See Finding #2021-002 included in the Summary Schedule of Prior Audit Findings. Recommendation: We recommend WPRFMC continue to improve the necessary internal controls to ensure expenditures are timely and accurately recorded and classified in the general ledger. These controls should provide for the timely reconciliation of cash disbursements reported on the Federal Financial Reports to expenditures recorded for each federal award in the general ledger.