Finding 2023-001; Lack of Written Policies and Procedures
Condition: The Organization does not have written policies and procedures in place for the administration and management of federal awards, as required by the Uniform Guidance (2 CFR Part 200). Specifically, the organization lacks documented procedures for financial management, internal controls, allowable costs, procurement, and other key operational areas.
Criteria: According to 2 CFR § 200.302(b)(7), non-federal entities must have written procedures to implement the requirements of § 200.305 (Payment) and must maintain written procedures for determining the allowability of costs in accordance with Subpart E—Cost Principles of this part and the terms and conditions of the federal award. Additionally, 2 CFR § 200.303 requires non-federal entities to establish and maintain effective internal controls, including written policies and procedures, to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The absence of written policies and procedures appears to be due to a lack of awareness of the specific requirements under the Uniform Guidance, coupled with insufficient resources allocated to the development of these necessary internal controls.
Effect: Without written policies and procedures, the Organization is at risk of non-compliance with federal regulations, which could lead to unallowable costs being charged to federal awards, inefficient or improper use of federal funds, and potential disallowance of costs during audits. This deficiency could also reduce the Organization's ability to ensure consistency and accountability in the management of federal funds.
Recommendation: The Organization should develop and implement comprehensive written policies and procedures in accordance with the requirements of the Uniform Guidance. These should include, but not be limited to, the following areas:
1. Financial management, including procedures for payments and cash management.
2. Internal controls to ensure compliance with federal requirements.
3. Determination of allowable costs in accordance with federal regulations and the terms and conditions of the award.
4. Time and effort reporting and compensation.
The Organization should also ensure that staff are adequately trained in these policies and procedures to enhance compliance and operational efficiency.
Views of Responsible Officials of Auditee: In response to the finding, management will take action to develop and implement the necessary written policies and procedures by June 30, 2025. Comprehensive training will be provided to all relevant staff to ensure compliance with federal requirements.
Finding 2023-002; Late Submission of Single Audit Report to the Federal Audit Clearinghouse (FAC)
Condition: The Organization did not submit the Single Audit report for the fiscal year ended December 31, 2023 to the Federal Audit Clearinghouse (FAC) within the required nine-month deadline. The report was due on September 30, 2024.
Criteria: According to 2 CFR Part 200, Uniform Guidance (§200.512), non-federal entities that expend $750,000 or more in federal awards during a fiscal year are required to submit the data collection form and reporting package to the FAC within the earlier of 30 days after receiving the auditor’s report or nine months after the end of the fiscal year.
Cause: The delay was due to personnel time restraints that caused the audit to not be completed timely.
Effect: The failure to submit the audit report within the required time frame is a violation of federal compliance requirements. Late submission may impact the auditee’s eligibility for future federal awards and could result in increased scrutiny by federal awarding agencies.
Recommendation: We recommend that management implement processes to ensure timely completion and submission of the Single Audit report in future years. This could include setting internal deadlines, increasing oversight, and coordinating with the audit firm to identify and address potential delays earlier in the audit process.
Views of Responsible Officials of Auditee: Management agrees with the finding and will take steps to improve the timeliness of the audit process.
Finding 2023-001; Lack of Written Policies and Procedures
Condition: The Organization does not have written policies and procedures in place for the administration and management of federal awards, as required by the Uniform Guidance (2 CFR Part 200). Specifically, the organization lacks documented procedures for financial management, internal controls, allowable costs, procurement, and other key operational areas.
Criteria: According to 2 CFR § 200.302(b)(7), non-federal entities must have written procedures to implement the requirements of § 200.305 (Payment) and must maintain written procedures for determining the allowability of costs in accordance with Subpart E—Cost Principles of this part and the terms and conditions of the federal award. Additionally, 2 CFR § 200.303 requires non-federal entities to establish and maintain effective internal controls, including written policies and procedures, to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The absence of written policies and procedures appears to be due to a lack of awareness of the specific requirements under the Uniform Guidance, coupled with insufficient resources allocated to the development of these necessary internal controls.
Effect: Without written policies and procedures, the Organization is at risk of non-compliance with federal regulations, which could lead to unallowable costs being charged to federal awards, inefficient or improper use of federal funds, and potential disallowance of costs during audits. This deficiency could also reduce the Organization's ability to ensure consistency and accountability in the management of federal funds.
Recommendation: The Organization should develop and implement comprehensive written policies and procedures in accordance with the requirements of the Uniform Guidance. These should include, but not be limited to, the following areas:
1. Financial management, including procedures for payments and cash management.
2. Internal controls to ensure compliance with federal requirements.
3. Determination of allowable costs in accordance with federal regulations and the terms and conditions of the award.
4. Time and effort reporting and compensation.
The Organization should also ensure that staff are adequately trained in these policies and procedures to enhance compliance and operational efficiency.
Views of Responsible Officials of Auditee: In response to the finding, management will take action to develop and implement the necessary written policies and procedures by June 30, 2025. Comprehensive training will be provided to all relevant staff to ensure compliance with federal requirements.
Finding 2023-002; Late Submission of Single Audit Report to the Federal Audit Clearinghouse (FAC)
Condition: The Organization did not submit the Single Audit report for the fiscal year ended December 31, 2023 to the Federal Audit Clearinghouse (FAC) within the required nine-month deadline. The report was due on September 30, 2024.
Criteria: According to 2 CFR Part 200, Uniform Guidance (§200.512), non-federal entities that expend $750,000 or more in federal awards during a fiscal year are required to submit the data collection form and reporting package to the FAC within the earlier of 30 days after receiving the auditor’s report or nine months after the end of the fiscal year.
Cause: The delay was due to personnel time restraints that caused the audit to not be completed timely.
Effect: The failure to submit the audit report within the required time frame is a violation of federal compliance requirements. Late submission may impact the auditee’s eligibility for future federal awards and could result in increased scrutiny by federal awarding agencies.
Recommendation: We recommend that management implement processes to ensure timely completion and submission of the Single Audit report in future years. This could include setting internal deadlines, increasing oversight, and coordinating with the audit firm to identify and address potential delays earlier in the audit process.
Views of Responsible Officials of Auditee: Management agrees with the finding and will take steps to improve the timeliness of the audit process.