FAC Explorer

Audit 316607

FY End
2023-12-31
Total Expended
$1.93M
Findings
2
Programs
3
Organization: Morgan County Water District (KY)
Year: 2023 Accepted: 2024-08-05
Auditor: CPA Accounting Firm

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
480351 2023-006 Material Weakness - ABCGHI
1056793 2023-006 Material Weakness - ABCGHI

Programs

ALN Program Spent Major Findings
66.468 Capitalization Grants for Drinking Water State Revolving Funds $1.76M Yes 1
21.027 Coronavirus State and Local Fiscal Recovery Funds $160,000 - 0
23.001 Appalachian Regional Development (see Individual Appalachian Programs) $6,933 - 0

Contacts

Name Title Type
NG64R9KK9NH7 Alexis Franklin Auditee
6067431204 Brenda K. Morgan Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Accrual Basis of Accounting De Minimis Rate Used: N Rate Explanation: Unknown The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal award activity of Morgan County Water District under programs of the federal government for the year ended December 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Morgan County Water District, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Morgan County Water District.
Title: Summary of Significant Accounting Policies Accounting Policies: Accrual Basis of Accounting De Minimis Rate Used: N Rate Explanation: Unknown Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, (Uniform Guidance), wherein cerain types of expenditures are not allowable or are limited as to reimbersement.
Title: Indirect Cost Rate Accounting Policies: Accrual Basis of Accounting De Minimis Rate Used: N Rate Explanation: Unknown Morgan County Water District does not use the 10-percent de minis indirect cost rate.
Title: Principal Balance on Loan Accounting Policies: Accrual Basis of Accounting De Minimis Rate Used: N Rate Explanation: Unknown At December 31, 2023, the District has a loan balance of $1,764,760 on the federal portion of loan proceeds expensed.

Finding Details

Finding 2023-006
Condition: This finding is repeated from the financial statement section. Before beginning the audit, inquiry was made of management about the amount of federal funds expended in the audit year ending December 31, 2023. Management indicated $160,000 in grant funds had been expended by forwarding an eamil from GWADD. In the course of our audit, we determined the district spent $1,764,760 in Federal loan funds, along with $6,933 in Rural Develoment grant proceeds. Managment was unable to provide evidence of proper internal controls over expenditures of Federal funds, i.e. written procedures. Criteria: 2 CFR 200.510 (b) states in part, "Schedule of expenditures of Federal awards. The auditee must also prepare a schedul of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as detrmined in accordance with 2 CFR 200.502." Effect: Failure to disclose the correct amount of federal funds expended. Cause: Failure to implement proper internal controls. Recommendation: We recommend the District implement proper internal controls over expenditures of Federal funds, including written procedures. We also recommend the District compete a schedule of expenditures of Federal awards (SEFA) in any year federal funds are expended.
Finding 2023-006
Condition: This finding is repeated from the financial statement section. Before beginning the audit, inquiry was made of management about the amount of federal funds expended in the audit year ending December 31, 2023. Management indicated $160,000 in grant funds had been expended by forwarding an eamil from GWADD. In the course of our audit, we determined the district spent $1,764,760 in Federal loan funds, along with $6,933 in Rural Develoment grant proceeds. Managment was unable to provide evidence of proper internal controls over expenditures of Federal funds, i.e. written procedures. Criteria: 2 CFR 200.510 (b) states in part, "Schedule of expenditures of Federal awards. The auditee must also prepare a schedul of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as detrmined in accordance with 2 CFR 200.502." Effect: Failure to disclose the correct amount of federal funds expended. Cause: Failure to implement proper internal controls. Recommendation: We recommend the District implement proper internal controls over expenditures of Federal funds, including written procedures. We also recommend the District compete a schedule of expenditures of Federal awards (SEFA) in any year federal funds are expended.