Audit 320266

2023-001 Finding – Federal Award Type: Special Reporting – FFATA – Significant Deficiency in Internal Control over Compliance. AL Number: 10.163 Market Protection and Promotion Criteria / Requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The subawards meeting the above definition are to be reported no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition / Context: It was noted during the audit that there were insufficient internal controls over first-tier subawards entered into during 2023 greater than $30,000. Of the 4 subawards tested under the Federal Funding Accountability and Transparency Act Subaward Reporting System, 2 were found to have not been submitted in the required time frame. Cause: Procedures are not in place to ensure that Oregon Tilth is maintaining adequate internal controls over compliance in a timely manner in regard to special reporting. Procedures were not in place to track and report first-tier subawards. Effect: Failure to maintain sufficient internal controls and proper procedures, including tracking over reporting first-tier subawards may result in wrongful use of federal funds and non-compliance with federal awards. Questioned Costs: None. Recommendation: The Organization should establish written policies and procedures regarding first-tier subawards including tracking and proper internal control procedures. Management’s Response: 25 09/12/2024 DRAFT

2023-001 Finding – Federal Award Type: Special Reporting – FFATA – Significant Deficiency in Internal Control over Compliance. AL Number: 10.163 Market Protection and Promotion Criteria / Requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The subawards meeting the above definition are to be reported no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition / Context: It was noted during the audit that there were insufficient internal controls over first-tier subawards entered into during 2023 greater than $30,000. Of the 4 subawards tested under the Federal Funding Accountability and Transparency Act Subaward Reporting System, 2 were found to have not been submitted in the required time frame. Cause: Procedures are not in place to ensure that Oregon Tilth is maintaining adequate internal controls over compliance in a timely manner in regard to special reporting. Procedures were not in place to track and report first-tier subawards. Effect: Failure to maintain sufficient internal controls and proper procedures, including tracking over reporting first-tier subawards may result in wrongful use of federal funds and non-compliance with federal awards. Questioned Costs: None. Recommendation: The Organization should establish written policies and procedures regarding first-tier subawards including tracking and proper internal control procedures. Management’s Response: 25 09/12/2024 DRAFT