Audit 330597

Context: During our consideration of the design and implementation of internal controls for the Decatur - Morgan County Port Authority, we noted that there is a lack of segregation of duties. Effect: This condition does not allow for the adequate separation of accounting tasks. Cause: This is typical for an organization of the size and complexity of the Decatur-Morgan Co. Port Authority. Recommendation: Professional standards require us to report that there is a lack of segregation of duties for the Authority’s accounting function. This lack of segregation is typical for an organization the size and complexity of the Authority. However, professional standards require that this control weakness be disclosed to the Board of Directors. Views of Management: Management agrees with the finding and recognizes that due to the size and complexity of the organization this weakness exists.

Federal Program: Assistance Listing Number: 23.002 Federal Program: Appalachian Area Development Federal Agency: Appalachian Regional Commission Federal Award Identification Number: ARC21C20233 Pass-Through Entity: Alabama Department of Economic and Community Affairs Criteria: Management is responsible for monitoring compliance with grant provisions, laws and regulations. The Authority engaged a grant administration specialist to monitor compliance with provisions of the grant award and to assist in completing grant reimbursement requests. Condition Found: Record Retention and Filing System: During tests of compliance over federal awards, the grant administration specialist was unable to timely provide selected documents, DOL Wage & Hour Reports, for subcontractor labor charged to the construction contract requested for compliance testing. Cause: The grant administration specialist did not have ready access to some of the subcontractor wage and hour reports we requested for testing compliance. Potential Effect: Failure to retain supporting records, along with a systematic method for accessing records, that document compliance with grant provisions related to expenditures subject to federal wage and labor laws, could result in the granting agency rejecting cost reimbursement requests or potential loss of the federal award. Questioned cost: $0. Context: Wage and hour reports selected for compliance testing were eventually provided for review. Recommendation: We recommend management conduct a detailed review of grant expenditure records to assure compliance with all provisions of the grant agreement. Views of Management: Management recognizes the importance of record retention and filing systems. When management became aware of the misplaced records related to wage and hour reports, management undertook a detailed review of the compliance requirements in the grant agreement and examined expenditures under the federal award to ensure the entity is in compliance with laws and regulations.

Context: During our consideration of the design and implementation of internal controls for the Decatur - Morgan County Port Authority, we noted that there is a lack of segregation of duties. Effect: This condition does not allow for the adequate separation of accounting tasks. Cause: This is typical for an organization of the size and complexity of the Decatur-Morgan Co. Port Authority. Recommendation: Professional standards require us to report that there is a lack of segregation of duties for the Authority’s accounting function. This lack of segregation is typical for an organization the size and complexity of the Authority. However, professional standards require that this control weakness be disclosed to the Board of Directors. Views of Management: Management agrees with the finding and recognizes that due to the size and complexity of the organization this weakness exists.

Federal Program: Assistance Listing Number: 23.002 Federal Program: Appalachian Area Development Federal Agency: Appalachian Regional Commission Federal Award Identification Number: ARC21C20233 Pass-Through Entity: Alabama Department of Economic and Community Affairs Criteria: Management is responsible for monitoring compliance with grant provisions, laws and regulations. The Authority engaged a grant administration specialist to monitor compliance with provisions of the grant award and to assist in completing grant reimbursement requests. Condition Found: Record Retention and Filing System: During tests of compliance over federal awards, the grant administration specialist was unable to timely provide selected documents, DOL Wage & Hour Reports, for subcontractor labor charged to the construction contract requested for compliance testing. Cause: The grant administration specialist did not have ready access to some of the subcontractor wage and hour reports we requested for testing compliance. Potential Effect: Failure to retain supporting records, along with a systematic method for accessing records, that document compliance with grant provisions related to expenditures subject to federal wage and labor laws, could result in the granting agency rejecting cost reimbursement requests or potential loss of the federal award. Questioned cost: $0. Context: Wage and hour reports selected for compliance testing were eventually provided for review. Recommendation: We recommend management conduct a detailed review of grant expenditure records to assure compliance with all provisions of the grant agreement. Views of Management: Management recognizes the importance of record retention and filing systems. When management became aware of the misplaced records related to wage and hour reports, management undertook a detailed review of the compliance requirements in the grant agreement and examined expenditures under the federal award to ensure the entity is in compliance with laws and regulations.