FAC Explorer

Audit 338834

FY End
2024-09-30
Total Expended
$23.45M
Findings
2
Programs
1
Organization: Beaver Water District (AR)
Year: 2024 Accepted: 2025-01-20
Auditor: Abacus CPAS LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
519728 2024-001 Significant Deficiency - P
1096170 2024-001 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
66.468 Drinking Water State Revolving Fund $23.45M Yes 1

Contacts

Name Title Type
FTV6BJMJTHF1 Adam Motherwell Auditee
4797563651 Sabrena Shipley Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: These schedules are prepared on the accrual basis of accounting and include all applicable federal awards received and expended during the year, with a focus on the Drinking Water State Revolving Fund (DWSRF). 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. De Minimis Rate Used: N Rate Explanation: Beaver Water District of Washington and Benton Counties has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying schedules of expenditures of federal awards are presented in accordance with 2 CFR section 200.510(b) and represent the financial activity of Beaver Water District of Washington and Benton Counties for the fiscal year ended September 30, 2024. The information in this Schedule 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 Beaver Water District of Washington and Benton Counties, it is not intended to and does not present the net position, changes in net position, or cash flows of Beaver Water District of Washington and Benton Counties.
Title: Summary of Significant Accounting Policies Accounting Policies: These schedules are prepared on the accrual basis of accounting and include all applicable federal awards received and expended during the year, with a focus on the Drinking Water State Revolving Fund (DWSRF). 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. De Minimis Rate Used: N Rate Explanation: Beaver Water District of Washington and Benton Counties has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. These schedules are prepared on the accrual basis of accounting and include all applicable federal awards received and expended during the year, with a focus on the Drinking Water State Revolving Fund (DWSRF). 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.
Title: Federal Loans Accounting Policies: These schedules are prepared on the accrual basis of accounting and include all applicable federal awards received and expended during the year, with a focus on the Drinking Water State Revolving Fund (DWSRF). 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. De Minimis Rate Used: N Rate Explanation: Beaver Water District of Washington and Benton Counties has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. The District was approved by the EPA and Drinking Water State Revolving Fund to receive loans totaling $125,686,157 on a reimbursement basis. The balance at the end of the period was $27,090,854. (See the Notes to the SEFA for chart/table instead.)
Title: Compliance with DWSRF Program Requirements Accounting Policies: These schedules are prepared on the accrual basis of accounting and include all applicable federal awards received and expended during the year, with a focus on the Drinking Water State Revolving Fund (DWSRF). 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. De Minimis Rate Used: N Rate Explanation: Beaver Water District of Washington and Benton Counties has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures related to DWSRF are reported in compliance with the specific requirements outlined in the EPA's regulations governing the DWSRF program. This includes adherence to the Safe Drinking Water Act and other applicable federal regulations.
Title: Indirect Cost Rate Accounting Policies: These schedules are prepared on the accrual basis of accounting and include all applicable federal awards received and expended during the year, with a focus on the Drinking Water State Revolving Fund (DWSRF). 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. De Minimis Rate Used: N Rate Explanation: Beaver Water District of Washington and Benton Counties has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Beaver Water District of Washington and Benton Counties has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: Assistance Listing Number Accounting Policies: These schedules are prepared on the accrual basis of accounting and include all applicable federal awards received and expended during the year, with a focus on the Drinking Water State Revolving Fund (DWSRF). 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. De Minimis Rate Used: N Rate Explanation: Beaver Water District of Washington and Benton Counties has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. The program title and ALN number was obtained from the federal or pass-through grantor or the sam.gov website.

Finding Details

Finding 2024-001
Condition – For the year ended September 30, 2024, the District had a failure of controls over the expense section from fraudulent vendor communications. The controls in place were followed and confirmed with the real vendor, which had confirmed the invoice had needed to be paid. The impersonator has intercepted communications inside the entity and posed as a known vendor. Criteria – Controls in place over expensing include staff submitting purchase orders to accounting department, which compare and match invoice and vendor information to confirm. Additional communication with vendor and comparing ACH or payment information is reviewed if necessary. Effects – The fraudulent vendor communications led to an ACH payment. When legal counsel and insurance company was contacted no claim could be submitted due to limited coverage, and the funds could not be tracked. The full amount was expensed. Recommendation – Abacus has recommended an increase in insurance coverage, and an evaluation of current expense controls. Additional controls to address phishing and vendor impersonation fraud. An evaluation of the IT environment and security is also recommended. Managements Response – Beaver Water District has committed to increase coverage and evaluate current controls. An additional evaluation of the IT environment and security.
Finding 2024-001
Condition – For the year ended September 30, 2024, the District had a failure of controls over the expense section from fraudulent vendor communications. The controls in place were followed and confirmed with the real vendor, which had confirmed the invoice had needed to be paid. The impersonator has intercepted communications inside the entity and posed as a known vendor. Criteria – Controls in place over expensing include staff submitting purchase orders to accounting department, which compare and match invoice and vendor information to confirm. Additional communication with vendor and comparing ACH or payment information is reviewed if necessary. Effects – The fraudulent vendor communications led to an ACH payment. When legal counsel and insurance company was contacted no claim could be submitted due to limited coverage, and the funds could not be tracked. The full amount was expensed. Recommendation – Abacus has recommended an increase in insurance coverage, and an evaluation of current expense controls. Additional controls to address phishing and vendor impersonation fraud. An evaluation of the IT environment and security is also recommended. Managements Response – Beaver Water District has committed to increase coverage and evaluate current controls. An additional evaluation of the IT environment and security.