FAC Explorer

Audit 319515

FY End
2023-12-31
Total Expended
$1.34M
Findings
4
Programs
1
Organization: West Central Electric Cooperative, Inc. (SD)
Year: 2023 Accepted: 2024-09-13
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
496752 2023-002 Material Weakness - P
496753 2023-003 Material Weakness - AB
1073194 2023-002 Material Weakness - P
1073195 2023-003 Material Weakness - AB

Programs

ALN Program Spent Major Findings
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $1.34M Yes 2

Contacts

Name Title Type
SZXVVK87U2X4 Jeff Birkeland Auditee
6056692472 Stacey Nelson Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: West Central Electric Cooperative, Inc. has not elected to use the 10% de minimis cost rate. The schedule of expenditures of federal awards (the schedule) includes the federal award activity of West Central Electric Cooperative, Inc. under programs of the federal government for the year ended December 31, 2023. The information 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 West Central Electric Cooperative, Inc., it is not intended to and does not present the financial position, changes in members’ equity, and cash flows of West Central Electric Cooperative, Inc.
Title: Disaster Grants – Public Assistance Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: West Central Electric Cooperative, Inc. has not elected to use the 10% de minimis cost rate. Per the OMB Compliance Supplement, nonfederal entities must record expenditures on the schedule of expenditures of federal awards when FEMA has approved the entity’s project worksheet. The expenditures included in the schedule were incurred in prior fiscal years. These expenditures were approved for payment by the federal agency in 2023 and therefore are included in the schedule when approved.

Finding Details

Finding 2023-002
Department of Homeland Security, State of South Dakota Office of Emergency Management, 97.036, FEMA-DR-4664-SD, FEMA-DR-4440-SD Disaster Grants – Public Assistance Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Cooperative does not have an internal control system designed to provide for a complete and accurate schedule of federal expenditures of federal awards being audited. As auditors, we were requested to assist with the preparation of the schedule and accompanying notes to the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Cooperative meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Cooperative would not be able to draft a complete and accurate schedule. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding form Prior Year: No Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, it is important that the Cooperative is aware of this condition for financial reporting requirements relating to the Cooperative’s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-003
Department of Homeland Security, State of South Dakota Office of Emergency Management, 97.036, FEMA-DR-4664-SD, FEMA-DR-4440-SD Disaster Grants – Public Assistance Material Weakness in Internal Control over Compliance Activities Allowed or Unallowed, Allowable Costs and Cost Principles Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Cooperative utilized a fringe benefits spreadsheet provided by FEMA and the information was not calculated correctly. Cause: The Cooperative did not formally review the spreadsheet to ensure information was accurate and up to date. Effect: There is a reasonable possibility that the Cooperative could have failed to identify any errors located within the fringe benefit spreadsheet. Questioned Costs: No questioned costs over $25,000. Context/Sampling: A nonstatistical sample of 60 transactions were selected for testing, which accounted for $1,063,076 out of $1,784,924 total federal program expenditures of which $1,338,693 were submitted for reimbursement. Repeat Finding form Prior Year: No Recommendation: We recommend the Cooperative review procedures surrounding fringe benefits to ensure the process includes a formal review of the spreadsheets prior to submission to the federal agency. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-002
Department of Homeland Security, State of South Dakota Office of Emergency Management, 97.036, FEMA-DR-4664-SD, FEMA-DR-4440-SD Disaster Grants – Public Assistance Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Cooperative does not have an internal control system designed to provide for a complete and accurate schedule of federal expenditures of federal awards being audited. As auditors, we were requested to assist with the preparation of the schedule and accompanying notes to the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Cooperative meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Cooperative would not be able to draft a complete and accurate schedule. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding form Prior Year: No Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, it is important that the Cooperative is aware of this condition for financial reporting requirements relating to the Cooperative’s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-003
Department of Homeland Security, State of South Dakota Office of Emergency Management, 97.036, FEMA-DR-4664-SD, FEMA-DR-4440-SD Disaster Grants – Public Assistance Material Weakness in Internal Control over Compliance Activities Allowed or Unallowed, Allowable Costs and Cost Principles Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Cooperative utilized a fringe benefits spreadsheet provided by FEMA and the information was not calculated correctly. Cause: The Cooperative did not formally review the spreadsheet to ensure information was accurate and up to date. Effect: There is a reasonable possibility that the Cooperative could have failed to identify any errors located within the fringe benefit spreadsheet. Questioned Costs: No questioned costs over $25,000. Context/Sampling: A nonstatistical sample of 60 transactions were selected for testing, which accounted for $1,063,076 out of $1,784,924 total federal program expenditures of which $1,338,693 were submitted for reimbursement. Repeat Finding form Prior Year: No Recommendation: We recommend the Cooperative review procedures surrounding fringe benefits to ensure the process includes a formal review of the spreadsheets prior to submission to the federal agency. Views of Responsible Officials: Management agrees with the finding.