2024-001 - Written Policies Required by the Uniform Grant Guidance
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Allowable Costs/Cost Principles, Cash Management, Procurement).
Federal program(s)
U.S. Department of Treasury -
COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) (ALN 21.027); Passed through Michigan Strategic Fund and Southwest Michigan First Corporation; All project numbers.
Criteria. The Uniform Guidance requires a non‐federal entity that has expended federal awards for a grant awarded on or after December 26, 2014 to have written policies pertaining to: 1) Payments (draws of federal funds and how to minimize the time lapsing between the receipt of federal funds and the disbursement to contractors/employees/subrecipients) (§200.302(6)); 2) Procurement (including bidding and a conflict of interest policy) (§200.318); 3) Allowability of costs charged to federal programs (§200.302(7)); 4) Compensation (personnel and benefits policy) (§200.430 and §200.431); and 5) Travel costs (including mileage and per diem) (§200.474).
Condition. Although the Organization has processes in place to cover these areas, there are no formal written policies covering payments, procurement, allowability of costs, compensation, and travel costs in accordance with the Uniform Guidance.
Cause. This condition appears to be the result of a time lag in identifying the requirement and developing a plan for compliance.
Effect. As a result of this condition, the Organization did not fully comply with the Uniform Guidance applicable to the above noted grants.
Questioned Costs. No costs were questioned as a result of this finding.
Recommendation. We recommend that the Organization develop and implement the required policies as soon as practical.
View of Responsible Officials. Management is in agreement and has prepared a Corrective Action Plan.
2024-001 - Written Policies Required by the Uniform Grant Guidance
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Allowable Costs/Cost Principles, Cash Management, Procurement).
Federal program(s)
U.S. Department of Treasury -
COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) (ALN 21.027); Passed through Michigan Strategic Fund and Southwest Michigan First Corporation; All project numbers.
Criteria. The Uniform Guidance requires a non‐federal entity that has expended federal awards for a grant awarded on or after December 26, 2014 to have written policies pertaining to: 1) Payments (draws of federal funds and how to minimize the time lapsing between the receipt of federal funds and the disbursement to contractors/employees/subrecipients) (§200.302(6)); 2) Procurement (including bidding and a conflict of interest policy) (§200.318); 3) Allowability of costs charged to federal programs (§200.302(7)); 4) Compensation (personnel and benefits policy) (§200.430 and §200.431); and 5) Travel costs (including mileage and per diem) (§200.474).
Condition. Although the Organization has processes in place to cover these areas, there are no formal written policies covering payments, procurement, allowability of costs, compensation, and travel costs in accordance with the Uniform Guidance.
Cause. This condition appears to be the result of a time lag in identifying the requirement and developing a plan for compliance.
Effect. As a result of this condition, the Organization did not fully comply with the Uniform Guidance applicable to the above noted grants.
Questioned Costs. No costs were questioned as a result of this finding.
Recommendation. We recommend that the Organization develop and implement the required policies as soon as practical.
View of Responsible Officials. Management is in agreement and has prepared a Corrective Action Plan.
2024-002 - Subrecipient Monitoring
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Subrecipient Monitoring).
Federal program(s)
U.S. Department of Treasury -
COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) (ALN 21.027); Passed through Michigan Strategic Fund; Award Number 398728.
Criteria. A pass-through entity must monitor the activities of the subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR 200.331(d)-(f)), plus any additional items identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award.
Condition. We noted that the Organization did not compile any risk assessments or perform adequate subrecipient monitoring during the fiscal year.
Cause. The cause of this condition appears to be a lack of understanding of the subrecipient monitoring requirements of the grants.
Effect. The lack of monitoring failed to provide reasonable assurance that the subrecipients complied with the provisions of the grant.
Questioned Costs. No costs were questioned due to the fact that the Organization approved subrecipient expenditures.
Recommendation. We recommend that the Organization create a subrecipient policy to ensure that all subrecipient grant awards are monitored in compliance with the Uniform Guidance requirements.
View of Responsible Officials. Management is in agreement and has prepared a Corrective Action Plan.
2024-003 - Reporting
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Reporting).
Federal program(s)
U.S. Department of Treasury -
COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) (ALN 21.027); Passed through Michigan Strategic Fund and Southwest Michigan First Corporation; All project numbers.
Criteria. Recipients of federal awards are required to report periodically on financial information, as specified by the 2 CFR 200 Compliance Supplement or grant agreement. Reported information should be supported by the entity’s accounting records and subjected to an independent review and approval prior to submission in order to detect and correct any errors or omissions.
Condition. During our audit procedures over the Organization's reporting process, we noted that none of the quarterly reports selected for testing included documentation that they were subjected to an independent review and approval prior to submission in order to detect and correct potential errors or omissions.
Cause. This condition is the result of management not recognizing the importance of establishing such controls.
Effect. As a result of this condition, the Organization did not comply fully with the reporting requirements under this federal award. In addition, the Organization was exposed to an increased risk that the reports filed could contain errors and not be detected and corrected on a timely basis.
Questioned Costs. No costs have been questioned as a result of this finding inasmuch as no unallowable costs were identified.
Recommendation. We recommend that the Organization establish procedures to ensure that all reports are subject to review and approval by an independent employee prior to submission, and that the review and approval is adequately documented.
View of Responsible Officials. Management is in agreement and has prepared a Corrective Action Plan.
2024-003 - Reporting
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Reporting).
Federal program(s)
U.S. Department of Treasury -
COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) (ALN 21.027); Passed through Michigan Strategic Fund and Southwest Michigan First Corporation; All project numbers.
Criteria. Recipients of federal awards are required to report periodically on financial information, as specified by the 2 CFR 200 Compliance Supplement or grant agreement. Reported information should be supported by the entity’s accounting records and subjected to an independent review and approval prior to submission in order to detect and correct any errors or omissions.
Condition. During our audit procedures over the Organization's reporting process, we noted that none of the quarterly reports selected for testing included documentation that they were subjected to an independent review and approval prior to submission in order to detect and correct potential errors or omissions.
Cause. This condition is the result of management not recognizing the importance of establishing such controls.
Effect. As a result of this condition, the Organization did not comply fully with the reporting requirements under this federal award. In addition, the Organization was exposed to an increased risk that the reports filed could contain errors and not be detected and corrected on a timely basis.
Questioned Costs. No costs have been questioned as a result of this finding inasmuch as no unallowable costs were identified.
Recommendation. We recommend that the Organization establish procedures to ensure that all reports are subject to review and approval by an independent employee prior to submission, and that the review and approval is adequately documented.
View of Responsible Officials. Management is in agreement and has prepared a Corrective Action Plan.
2024-001 - Written Policies Required by the Uniform Grant Guidance
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Allowable Costs/Cost Principles, Cash Management, Procurement).
Federal program(s)
U.S. Department of Treasury -
COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) (ALN 21.027); Passed through Michigan Strategic Fund and Southwest Michigan First Corporation; All project numbers.
Criteria. The Uniform Guidance requires a non‐federal entity that has expended federal awards for a grant awarded on or after December 26, 2014 to have written policies pertaining to: 1) Payments (draws of federal funds and how to minimize the time lapsing between the receipt of federal funds and the disbursement to contractors/employees/subrecipients) (§200.302(6)); 2) Procurement (including bidding and a conflict of interest policy) (§200.318); 3) Allowability of costs charged to federal programs (§200.302(7)); 4) Compensation (personnel and benefits policy) (§200.430 and §200.431); and 5) Travel costs (including mileage and per diem) (§200.474).
Condition. Although the Organization has processes in place to cover these areas, there are no formal written policies covering payments, procurement, allowability of costs, compensation, and travel costs in accordance with the Uniform Guidance.
Cause. This condition appears to be the result of a time lag in identifying the requirement and developing a plan for compliance.
Effect. As a result of this condition, the Organization did not fully comply with the Uniform Guidance applicable to the above noted grants.
Questioned Costs. No costs were questioned as a result of this finding.
Recommendation. We recommend that the Organization develop and implement the required policies as soon as practical.
View of Responsible Officials. Management is in agreement and has prepared a Corrective Action Plan.
2024-001 - Written Policies Required by the Uniform Grant Guidance
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Allowable Costs/Cost Principles, Cash Management, Procurement).
Federal program(s)
U.S. Department of Treasury -
COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) (ALN 21.027); Passed through Michigan Strategic Fund and Southwest Michigan First Corporation; All project numbers.
Criteria. The Uniform Guidance requires a non‐federal entity that has expended federal awards for a grant awarded on or after December 26, 2014 to have written policies pertaining to: 1) Payments (draws of federal funds and how to minimize the time lapsing between the receipt of federal funds and the disbursement to contractors/employees/subrecipients) (§200.302(6)); 2) Procurement (including bidding and a conflict of interest policy) (§200.318); 3) Allowability of costs charged to federal programs (§200.302(7)); 4) Compensation (personnel and benefits policy) (§200.430 and §200.431); and 5) Travel costs (including mileage and per diem) (§200.474).
Condition. Although the Organization has processes in place to cover these areas, there are no formal written policies covering payments, procurement, allowability of costs, compensation, and travel costs in accordance with the Uniform Guidance.
Cause. This condition appears to be the result of a time lag in identifying the requirement and developing a plan for compliance.
Effect. As a result of this condition, the Organization did not fully comply with the Uniform Guidance applicable to the above noted grants.
Questioned Costs. No costs were questioned as a result of this finding.
Recommendation. We recommend that the Organization develop and implement the required policies as soon as practical.
View of Responsible Officials. Management is in agreement and has prepared a Corrective Action Plan.
2024-002 - Subrecipient Monitoring
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Subrecipient Monitoring).
Federal program(s)
U.S. Department of Treasury -
COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) (ALN 21.027); Passed through Michigan Strategic Fund; Award Number 398728.
Criteria. A pass-through entity must monitor the activities of the subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR 200.331(d)-(f)), plus any additional items identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award.
Condition. We noted that the Organization did not compile any risk assessments or perform adequate subrecipient monitoring during the fiscal year.
Cause. The cause of this condition appears to be a lack of understanding of the subrecipient monitoring requirements of the grants.
Effect. The lack of monitoring failed to provide reasonable assurance that the subrecipients complied with the provisions of the grant.
Questioned Costs. No costs were questioned due to the fact that the Organization approved subrecipient expenditures.
Recommendation. We recommend that the Organization create a subrecipient policy to ensure that all subrecipient grant awards are monitored in compliance with the Uniform Guidance requirements.
View of Responsible Officials. Management is in agreement and has prepared a Corrective Action Plan.
2024-003 - Reporting
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Reporting).
Federal program(s)
U.S. Department of Treasury -
COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) (ALN 21.027); Passed through Michigan Strategic Fund and Southwest Michigan First Corporation; All project numbers.
Criteria. Recipients of federal awards are required to report periodically on financial information, as specified by the 2 CFR 200 Compliance Supplement or grant agreement. Reported information should be supported by the entity’s accounting records and subjected to an independent review and approval prior to submission in order to detect and correct any errors or omissions.
Condition. During our audit procedures over the Organization's reporting process, we noted that none of the quarterly reports selected for testing included documentation that they were subjected to an independent review and approval prior to submission in order to detect and correct potential errors or omissions.
Cause. This condition is the result of management not recognizing the importance of establishing such controls.
Effect. As a result of this condition, the Organization did not comply fully with the reporting requirements under this federal award. In addition, the Organization was exposed to an increased risk that the reports filed could contain errors and not be detected and corrected on a timely basis.
Questioned Costs. No costs have been questioned as a result of this finding inasmuch as no unallowable costs were identified.
Recommendation. We recommend that the Organization establish procedures to ensure that all reports are subject to review and approval by an independent employee prior to submission, and that the review and approval is adequately documented.
View of Responsible Officials. Management is in agreement and has prepared a Corrective Action Plan.
2024-003 - Reporting
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Reporting).
Federal program(s)
U.S. Department of Treasury -
COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) (ALN 21.027); Passed through Michigan Strategic Fund and Southwest Michigan First Corporation; All project numbers.
Criteria. Recipients of federal awards are required to report periodically on financial information, as specified by the 2 CFR 200 Compliance Supplement or grant agreement. Reported information should be supported by the entity’s accounting records and subjected to an independent review and approval prior to submission in order to detect and correct any errors or omissions.
Condition. During our audit procedures over the Organization's reporting process, we noted that none of the quarterly reports selected for testing included documentation that they were subjected to an independent review and approval prior to submission in order to detect and correct potential errors or omissions.
Cause. This condition is the result of management not recognizing the importance of establishing such controls.
Effect. As a result of this condition, the Organization did not comply fully with the reporting requirements under this federal award. In addition, the Organization was exposed to an increased risk that the reports filed could contain errors and not be detected and corrected on a timely basis.
Questioned Costs. No costs have been questioned as a result of this finding inasmuch as no unallowable costs were identified.
Recommendation. We recommend that the Organization establish procedures to ensure that all reports are subject to review and approval by an independent employee prior to submission, and that the review and approval is adequately documented.
View of Responsible Officials. Management is in agreement and has prepared a Corrective Action Plan.