Audit 320953

Department of Homeland Security, State of Iowa Homeland Security & Emergency Management, 97.039, DR‐4421‐0046 & DR‐4483‐0013 Hazard Mitigation Grant Program Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance 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 the terms and conditions of the federal award. Condition: In three of three quarterly reports tested, we noted the Cooperative improperly excluded information on the total funds expended to date lines for the federal, state, local and total categories. a) The DR‐4421 quarterly report ending June 30, 2023 improperly excluded total expenditures incurred to date in the amount of $43,258. b) The DR‐4421 quarterly report ending September 30, 2023 improperly excluded total expenditures incurred to date in the amount of $62,217. c) The DR‐4483 quarterly report ending September 30, 2023 improperly excluded expenditures incurred to date in the amount of $61,575. Cause: The Cooperative’s independent review process over the quarterly performance reports did not identify the improperly excluded expenditures on the report. Effect: Lack of compliance with designed internal controls over reporting could result in the Cooperative reporting incorrect or incomplete information. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 3 reports out of 8 quarterly performance reports. Repeat Finding form Prior Year: No Recommendation: We recommend the Cooperative review internal control procedures over reporting to ensure reports are submitted with all required information. Views of Responsible Officials: Management agrees with the finding.

Department of Homeland Security, State of Iowa Homeland Security & Emergency Management, 97.039, DR‐4421‐0046 & DR‐4483‐0013 Hazard Mitigation Grant Program Preparation of 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.

Department of Homeland Security, State of Iowa Homeland Security & Emergency Management, 97.039, DR‐4421‐0046 & DR‐4483‐0013 Hazard Mitigation Grant Program Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance 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 the terms and conditions of the federal award. Condition: In three of three quarterly reports tested, we noted the Cooperative improperly excluded information on the total funds expended to date lines for the federal, state, local and total categories. a) The DR‐4421 quarterly report ending June 30, 2023 improperly excluded total expenditures incurred to date in the amount of $43,258. b) The DR‐4421 quarterly report ending September 30, 2023 improperly excluded total expenditures incurred to date in the amount of $62,217. c) The DR‐4483 quarterly report ending September 30, 2023 improperly excluded expenditures incurred to date in the amount of $61,575. Cause: The Cooperative’s independent review process over the quarterly performance reports did not identify the improperly excluded expenditures on the report. Effect: Lack of compliance with designed internal controls over reporting could result in the Cooperative reporting incorrect or incomplete information. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 3 reports out of 8 quarterly performance reports. Repeat Finding form Prior Year: No Recommendation: We recommend the Cooperative review internal control procedures over reporting to ensure reports are submitted with all required information. Views of Responsible Officials: Management agrees with the finding.

Department of Homeland Security, State of Iowa Homeland Security & Emergency Management, 97.039, DR‐4421‐0046 & DR‐4483‐0013 Hazard Mitigation Grant Program Preparation of 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.