Audit 355234

FY End

2024-12-31

Total Expended

$1.71M

Findings

2

Programs

1

Organization: Dakota Rural Water District (ND)

Year: 2024 Accepted: 2025-05-01

Auditor: Eide Bailly LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
558986	2024-006	Material Weakness	Yes	I
1135428	2024-006	Material Weakness	Yes	I

ALN	Program	Spent	Major	Findings
66.468	Drinking Water State Revolving Fund	$1.71M	Yes	1

Contacts

Name	Title	Type
R87YHK3BLA23	Jan Lee	Auditee
7015242393	Derek Flanagan	Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - Basis of Presentation Accounting Policies: Expenditures reported in the schedule are reported on the accrual basis of accounting. When applicable,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. No federal finanical assistance has been provided to a subreceipient. De Minimis Rate Used: N Rate Explanation: The District has not elected to use the 10% de minimis cost rate The accompanying schedule of expenditures of federal awards (“the schedule”) includes the federal award activity of the District under programs of the federal government for the year ended December 31, 2024. The information 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 the District, it is not intended to and does not present the financial position or changes in net position or cash flows of the District.

Title: Note 2 - Summary of Significant Accounting Policies Accounting Policies: Expenditures reported in the schedule are reported on the accrual basis of accounting. When applicable,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. No federal finanical assistance has been provided to a subreceipient. De Minimis Rate Used: N Rate Explanation: The District has not elected to use the 10% de minimis cost rate Expenditures reported in the schedule are reported on the accrual basis of accounting. When applicable,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. No federal finanical assistance has been provided to a subreceipient.

Title: Note 3 - Indirect Cost Rate Accounting Policies: Expenditures reported in the schedule are reported on the accrual basis of accounting. When applicable,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. No federal finanical assistance has been provided to a subreceipient. De Minimis Rate Used: N Rate Explanation: The District has not elected to use the 10% de minimis cost rate The District has not elected to use the 10% de minimis cost rate

Title: Note 4 - Loan Program Accounting Policies: Expenditures reported in the schedule are reported on the accrual basis of accounting. When applicable,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. No federal finanical assistance has been provided to a subreceipient. De Minimis Rate Used: N Rate Explanation: The District has not elected to use the 10% de minimis cost rate As of December 31, 2024, the District’s liability relating to the Drinking Water State Revolving Fund (SRF) Loan (FFAL #66.468) is $396,118.

Finding Details

Finding 2024-006

Environmental Protection Agency, passed through State of North Dakota Department of Environmental Quality Federal Financial Assistance Listing #66.468 Capitalization Grants for Drinking Water Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Criteria - Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition - During the course of our engagement, it was identified that the District did not have a written policy on procurement that satisfied the requirements of 2 CFR sections 200.318 through 200.326. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect - A lack of documented policies increase the overall risk that employees are not aware of the specific requirements with of procurement, suspension, and debarment. Questioned Costs – None reported Context/Sampling - Overall procurement policy. Repeat Finding from Prior Year(s) – Yes, prior year finding 2023-006 Recommendation - We recommend that management establish a written policy that addresses all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials - There is no disagreement with the audit finding.

Finding 2024-006

Environmental Protection Agency, passed through State of North Dakota Department of Environmental Quality Federal Financial Assistance Listing #66.468 Capitalization Grants for Drinking Water Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Criteria - Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition - During the course of our engagement, it was identified that the District did not have a written policy on procurement that satisfied the requirements of 2 CFR sections 200.318 through 200.326. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect - A lack of documented policies increase the overall risk that employees are not aware of the specific requirements with of procurement, suspension, and debarment. Questioned Costs – None reported Context/Sampling - Overall procurement policy. Repeat Finding from Prior Year(s) – Yes, prior year finding 2023-006 Recommendation - We recommend that management establish a written policy that addresses all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials - There is no disagreement with the audit finding.