Type of Finding: Material Weakness in Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: 2 CFR 200.320 requires non-federal entities to have and use documented procurement procedures. 2 CFR 200.318(i) states that "the non-Federal entity must maintain record sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price". In addition, 2 CFR 200.320(a)(2)(i) states that "... If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity". Furthermore, 2 CFR 200.320(b) states that "When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section.".
Condition: During our testing, it was noted that the Organization was not performing suspension and debarment checks prior to entering into vendor contracts to ensure the vendor was not listed in the suspended or debarred database maintained by the General Services Administration. In addition, the Organization does not have an established procurement policy nor procedures in place at the time of the audit in compliance with Uniform Guidance.
Questioned costs: None.
Section III – Findings and Questioned Costs – Major Federal Programs (Continued)
Context: For procurement, a sample of 8 was made from a population of 30 procurement transactions charged to the major program that exceeded $3,000 (the Organization's procurement policy after 2023 and below the minimum micro-purchase threshold before it was increased by the FAR to $10,000 for those with a written established policy). Of the 8 sampled procurement selections, three did not retain an adequate number of price comparisons prior to exercising the procurement, four did not follow the formal procurement methods for proposals when required, and all lacked evidence of controls over procurement considerations.
For suspension and debarment, a sample of 3 was made from a population of 3 (entire population) suspension and debarment transactions charged to the major program. Of the 3 sampled, all were not checked for suspension or debarment prior to entering into the transaction.
Cause: Prior to completing the prior year’s audit, staff were not aware of the specific compliance requirements and procedures for procurement, suspension, and debarment status.
Effect: Purchases may occur that do not follow the procurement, suspension and debarment standards as required by Uniform Guidance, and contracts to vendors that had been suspended or debarred could be awarded and not detected.
Repeat Finding: The finding is a repeat of a finding in the immediate prior year. Prior year finding number was 2022-002.
Recommendation: We recommend the Organization ensure its current process to review potential contractors for suspension and debarment is taking place prior to entering into transactions with such entities. The Organization has already taken steps to address considerations around procurement by implementing a Procurement Approval form. CLA recommends the use of this form, including signature, and emphasizes the importance of retaining adequate price rate quotations, RFP documentation, sole-source evidence, and price analyses in accordance with their established thresholds.
Views of responsible officials: There is no disagreement with the audit finding.
Type of Finding: Significant Deficiency in Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: The Organization, as part of their stated controls, require that expenditures must be approved by the ED, CFO, or program directors / managers. In addition, § 200.303(a) requires the Organization to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition: During our testing, it was noted that 12 of 60 samples did not include sufficient records to substantiate approval of the disbursement.
Questioned costs: None.
Context: A sample of 60 was made from a population of over 250 disbursements charged to the major program. Of the 60 sampled costs, 12 did not have sufficient records to substantiate adequate approval.
Cause: Approvals are not maintained for ACH transactions.
Effect: Without adequate controls in place to ensure costs are reasonable and intended for the program charged, the Organization could incorrectly charge expenditures to the federal program, report fraudulent expenditures, or not request appropriate reimbursement that the Organization is entitled to under the terms of the grant.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-003.
Recommendation: CLA recommends that additional emphasis of documentary evidence of approvals be made, and such evidence should be obtained and retained by the Organization as proof of oversight of expenditure of federal funds. CLA would also recommend the use of an AP voucher, or similar, for each type of disbursement that leaves the Organization (check, ACH, EFT, credit card, etc.) to improve documentary evidence that costs are being reviewed and approved for appropriateness.
Views of responsible officials: There is no disagreement with the audit finding.
Type of Finding: Significant Deficiency in Compliance and Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: 2 CFR 200.303(a) states that a non-Federal entity must "Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." In addition, 2 CFR 200.329(c)(1) states that “the non-federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity”. Per the award agreement for contract W912DW-20-2-0003, "Recipient shall submit to the Agreement Administrator (see paragraph 1.2.1) progress reports on a quarterly basis utilizing the form included in Attachment B of this agreement. Reports are due no later than 30 days following the end of each reporting period. A final performance progress report shall be submitted within 90 days after the expiration date of the award."
Condition: During testing it was noted that 3 of the 6 financial reports tested did not include documentary evidence of Executive Director review and approval. In addition, 2 of the 2 performance reports tested were filed after the filing deadline.
Questioned costs: None.
Context: A sample of 6 was made from a population of 17 financial reports, and a sample of 2 was made from a population of 4 performance reports. Of the 6 financial reports sampled, 3 did not have documentary evidence of Executive Director review and approval. Of the 2 performance reports sampled, both were filed after the submission deadline date.
Cause: Late filing is due to a lack of adherence to the due dates as defined within the contract terms. The Organization does not have adequate controls in place to document the Executive Director's review and approval of the Federal Financial Reports (SF-425).
Effect: Not filing reports on a timely basis can present risks, such as outdated and unreliable information or the inability to detect potential fraud or irregularities. In addition, delayed reports can impede regulatory authorities' ability to monitor compliance, detect patterns or trends, and assess risks in a timely manner. Without adequate documentary evidence around the review of financial reports, there is an increased risk of errors and fraud in the reporting process, which could result in inaccurate financial reporting and misappropriation of funds.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-004.
Recommendation: CLA recommends for the Organization to place emphasis on stronger controls around the timely filing of required reports, such as retaining a monthly checklist of required reconciliations and reports. CLA also recommends implementing a procedure that documents the Executive Director's review and approval of the Federal Financial Reports (SF-425s), whether that be via an email chain or retaining a copy that also includes the Executive Director's signature on the report.
Views of responsible officials: There is no disagreement with the audit finding.
Type of Finding: Significant Deficiency in Compliance and Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: 2 CFR 200.302(a) on Financial management states that "... the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award".
Condition: During testing, 2 of the 5 samples selected did not include sufficient documentation to agree all amounts requested for reimbursement for the month in question to the expenditures listed in the general ledger detail by program.
Questioned costs: Unknown.
Context: A sample of 5 monthly reimbursement requests were taken from a population of 13. Of the 5 sampled, two were insufficiently supported to agree the amounts requested for reimbursement for the month in question to the expenditures listed in the general ledger detail by program.
Cause: The Organization was using a cumulative profit and loss to file monthly reimbursement requests (beginning of the year through the reimbursement month). In addition, profit and loss reports were not consistently saved at the time the reports were prepared for reimbursement for January and February 2023.
Effect: The Organization is currently in noncompliance with federal regulations with regard to adequate documentation. Without adequate documentation in place to ensure costs are evidenced and reconcile to the expenditures documented in the underlying accounting information that is used to prepare the SEFA, the Organization could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement that the Organization is entitled to under the terms of the grant.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-005.
Recommendation: Starting in March 2023, the Organization has already implemented a new process for the preparation of monthly reimbursement requests, including documentation retention. Point-in-time reports (i.e., profit and losses) are saved at the time of report preparation. This has enhanced clarity of
costs attributable to each monthly period and reduces the chance that costs will be missed when requesting for reimbursement.
Views of responsible officials: There is no disagreement with the audit finding.
Type of Finding: Significant Deficiency in Compliance and Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: 2 CFR 200.313(d)(2) states that a physical inventory of property must be taken and the results reconciled with the property record at least once every two years.
Condition: During testing, it was noted that a physical inventory and reconciliation with the property records had not been performed.
Questioned costs: None.
Context: A sample of 4 was made from a population of 4 pieces of equipment purchased with funds from the major program (entire population). Of the 4 sampled, all belonged to a population of assets that had not been part of a formal physical inventory and property reconciliation.
Cause: The Organization does not currently have procedures in place to perform a formal inventory count and reconciliation with the property records at least once every two years.
Effect: Without periodic equipment counts, the Organization is in noncompliance with federal regulations around Equipment and Real Property Management. In addition, there is an increased risk of errors and inaccuracies in the inventory records and an increased risk of fraud or theft going undetected.
Repeat Finding: No.
Recommendation: CLA recommends that the Organization adopt policies and procedures that include performing a formal inventory count and reconciliation back to the property records at least once every two years, in compliance with 2 CFR 200.313(d)(2). The inventory count should be documented and signed by the individual performing the count as a form of attestation to the amounts recorded.
Views of responsible officials: There is no disagreement with the audit finding.
Type of Finding: Significant Deficiency in Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: 2 CFR 200.303(a) states that a non-federal entity must "Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)."
Condition: During testing, 2 of the 60 samples selected had an individual approving their own timecard.
Questioned costs: None.
Context: A sample of 60 was made from a population of over 250 paychecks processed during the year with costs charged to the major program. Out of the 60 timecards that were sampled, there were two instances where the individual whose timecard was being reviewed also approved their own timecard.
Cause: At the time of these payroll runs, the Organization did not have procedures in place to identify an appropriate approver for the Executive Director's timecards.
Effect: Without appropriate segregation of duties around the approval of timecards, there is an increased risk of errors and fraud in the timekeeping and payroll process, which could result in inaccurate financial reporting and misappropriation of funds.
Repeat Finding: No.
Recommendation: CLA recommends that another individual with knowledge of the Executive Director's time and effort on the various programs approve his timecards. The Organization has already identified a member of the executive team to perform such functions and will implement the change going forward.
Views of responsible officials: There is no disagreement with the audit finding.
Type of Finding: Material Weakness in Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: 2 CFR 200.320 requires non-federal entities to have and use documented procurement procedures. 2 CFR 200.318(i) states that "the non-Federal entity must maintain record sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price". In addition, 2 CFR 200.320(a)(2)(i) states that "... If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity". Furthermore, 2 CFR 200.320(b) states that "When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section.".
Condition: During our testing, it was noted that the Organization was not performing suspension and debarment checks prior to entering into vendor contracts to ensure the vendor was not listed in the suspended or debarred database maintained by the General Services Administration. In addition, the Organization does not have an established procurement policy nor procedures in place at the time of the audit in compliance with Uniform Guidance.
Questioned costs: None.
Section III – Findings and Questioned Costs – Major Federal Programs (Continued)
Context: For procurement, a sample of 8 was made from a population of 30 procurement transactions charged to the major program that exceeded $3,000 (the Organization's procurement policy after 2023 and below the minimum micro-purchase threshold before it was increased by the FAR to $10,000 for those with a written established policy). Of the 8 sampled procurement selections, three did not retain an adequate number of price comparisons prior to exercising the procurement, four did not follow the formal procurement methods for proposals when required, and all lacked evidence of controls over procurement considerations.
For suspension and debarment, a sample of 3 was made from a population of 3 (entire population) suspension and debarment transactions charged to the major program. Of the 3 sampled, all were not checked for suspension or debarment prior to entering into the transaction.
Cause: Prior to completing the prior year’s audit, staff were not aware of the specific compliance requirements and procedures for procurement, suspension, and debarment status.
Effect: Purchases may occur that do not follow the procurement, suspension and debarment standards as required by Uniform Guidance, and contracts to vendors that had been suspended or debarred could be awarded and not detected.
Repeat Finding: The finding is a repeat of a finding in the immediate prior year. Prior year finding number was 2022-002.
Recommendation: We recommend the Organization ensure its current process to review potential contractors for suspension and debarment is taking place prior to entering into transactions with such entities. The Organization has already taken steps to address considerations around procurement by implementing a Procurement Approval form. CLA recommends the use of this form, including signature, and emphasizes the importance of retaining adequate price rate quotations, RFP documentation, sole-source evidence, and price analyses in accordance with their established thresholds.
Views of responsible officials: There is no disagreement with the audit finding.
Type of Finding: Significant Deficiency in Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: The Organization, as part of their stated controls, require that expenditures must be approved by the ED, CFO, or program directors / managers. In addition, § 200.303(a) requires the Organization to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition: During our testing, it was noted that 12 of 60 samples did not include sufficient records to substantiate approval of the disbursement.
Questioned costs: None.
Context: A sample of 60 was made from a population of over 250 disbursements charged to the major program. Of the 60 sampled costs, 12 did not have sufficient records to substantiate adequate approval.
Cause: Approvals are not maintained for ACH transactions.
Effect: Without adequate controls in place to ensure costs are reasonable and intended for the program charged, the Organization could incorrectly charge expenditures to the federal program, report fraudulent expenditures, or not request appropriate reimbursement that the Organization is entitled to under the terms of the grant.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-003.
Recommendation: CLA recommends that additional emphasis of documentary evidence of approvals be made, and such evidence should be obtained and retained by the Organization as proof of oversight of expenditure of federal funds. CLA would also recommend the use of an AP voucher, or similar, for each type of disbursement that leaves the Organization (check, ACH, EFT, credit card, etc.) to improve documentary evidence that costs are being reviewed and approved for appropriateness.
Views of responsible officials: There is no disagreement with the audit finding.
Type of Finding: Significant Deficiency in Compliance and Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: 2 CFR 200.303(a) states that a non-Federal entity must "Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." In addition, 2 CFR 200.329(c)(1) states that “the non-federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity”. Per the award agreement for contract W912DW-20-2-0003, "Recipient shall submit to the Agreement Administrator (see paragraph 1.2.1) progress reports on a quarterly basis utilizing the form included in Attachment B of this agreement. Reports are due no later than 30 days following the end of each reporting period. A final performance progress report shall be submitted within 90 days after the expiration date of the award."
Condition: During testing it was noted that 3 of the 6 financial reports tested did not include documentary evidence of Executive Director review and approval. In addition, 2 of the 2 performance reports tested were filed after the filing deadline.
Questioned costs: None.
Context: A sample of 6 was made from a population of 17 financial reports, and a sample of 2 was made from a population of 4 performance reports. Of the 6 financial reports sampled, 3 did not have documentary evidence of Executive Director review and approval. Of the 2 performance reports sampled, both were filed after the submission deadline date.
Cause: Late filing is due to a lack of adherence to the due dates as defined within the contract terms. The Organization does not have adequate controls in place to document the Executive Director's review and approval of the Federal Financial Reports (SF-425).
Effect: Not filing reports on a timely basis can present risks, such as outdated and unreliable information or the inability to detect potential fraud or irregularities. In addition, delayed reports can impede regulatory authorities' ability to monitor compliance, detect patterns or trends, and assess risks in a timely manner. Without adequate documentary evidence around the review of financial reports, there is an increased risk of errors and fraud in the reporting process, which could result in inaccurate financial reporting and misappropriation of funds.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-004.
Recommendation: CLA recommends for the Organization to place emphasis on stronger controls around the timely filing of required reports, such as retaining a monthly checklist of required reconciliations and reports. CLA also recommends implementing a procedure that documents the Executive Director's review and approval of the Federal Financial Reports (SF-425s), whether that be via an email chain or retaining a copy that also includes the Executive Director's signature on the report.
Views of responsible officials: There is no disagreement with the audit finding.
Type of Finding: Significant Deficiency in Compliance and Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: 2 CFR 200.302(a) on Financial management states that "... the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award".
Condition: During testing, 2 of the 5 samples selected did not include sufficient documentation to agree all amounts requested for reimbursement for the month in question to the expenditures listed in the general ledger detail by program.
Questioned costs: Unknown.
Context: A sample of 5 monthly reimbursement requests were taken from a population of 13. Of the 5 sampled, two were insufficiently supported to agree the amounts requested for reimbursement for the month in question to the expenditures listed in the general ledger detail by program.
Cause: The Organization was using a cumulative profit and loss to file monthly reimbursement requests (beginning of the year through the reimbursement month). In addition, profit and loss reports were not consistently saved at the time the reports were prepared for reimbursement for January and February 2023.
Effect: The Organization is currently in noncompliance with federal regulations with regard to adequate documentation. Without adequate documentation in place to ensure costs are evidenced and reconcile to the expenditures documented in the underlying accounting information that is used to prepare the SEFA, the Organization could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement that the Organization is entitled to under the terms of the grant.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-005.
Recommendation: Starting in March 2023, the Organization has already implemented a new process for the preparation of monthly reimbursement requests, including documentation retention. Point-in-time reports (i.e., profit and losses) are saved at the time of report preparation. This has enhanced clarity of
costs attributable to each monthly period and reduces the chance that costs will be missed when requesting for reimbursement.
Views of responsible officials: There is no disagreement with the audit finding.
Type of Finding: Significant Deficiency in Compliance and Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: 2 CFR 200.313(d)(2) states that a physical inventory of property must be taken and the results reconciled with the property record at least once every two years.
Condition: During testing, it was noted that a physical inventory and reconciliation with the property records had not been performed.
Questioned costs: None.
Context: A sample of 4 was made from a population of 4 pieces of equipment purchased with funds from the major program (entire population). Of the 4 sampled, all belonged to a population of assets that had not been part of a formal physical inventory and property reconciliation.
Cause: The Organization does not currently have procedures in place to perform a formal inventory count and reconciliation with the property records at least once every two years.
Effect: Without periodic equipment counts, the Organization is in noncompliance with federal regulations around Equipment and Real Property Management. In addition, there is an increased risk of errors and inaccuracies in the inventory records and an increased risk of fraud or theft going undetected.
Repeat Finding: No.
Recommendation: CLA recommends that the Organization adopt policies and procedures that include performing a formal inventory count and reconciliation back to the property records at least once every two years, in compliance with 2 CFR 200.313(d)(2). The inventory count should be documented and signed by the individual performing the count as a form of attestation to the amounts recorded.
Views of responsible officials: There is no disagreement with the audit finding.
Type of Finding: Significant Deficiency in Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: 2 CFR 200.303(a) states that a non-federal entity must "Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)."
Condition: During testing, 2 of the 60 samples selected had an individual approving their own timecard.
Questioned costs: None.
Context: A sample of 60 was made from a population of over 250 paychecks processed during the year with costs charged to the major program. Out of the 60 timecards that were sampled, there were two instances where the individual whose timecard was being reviewed also approved their own timecard.
Cause: At the time of these payroll runs, the Organization did not have procedures in place to identify an appropriate approver for the Executive Director's timecards.
Effect: Without appropriate segregation of duties around the approval of timecards, there is an increased risk of errors and fraud in the timekeeping and payroll process, which could result in inaccurate financial reporting and misappropriation of funds.
Repeat Finding: No.
Recommendation: CLA recommends that another individual with knowledge of the Executive Director's time and effort on the various programs approve his timecards. The Organization has already identified a member of the executive team to perform such functions and will implement the change going forward.
Views of responsible officials: There is no disagreement with the audit finding.