Audit 357376

2023-003 Subrecipient Monitoring and Reporting - Material Weakness in Internal Control over Compliance and Noncompliance * Identification of Federal Programs: 14.862 Indian Community Development Block Grant * Criteria: There are various federal pass-through programs that the Association administers. When the Association receives these grants and passes them through to a subrecipient, the Association is required to complete subrecipient monitoring procedures. * Condition: The Association receives reports from the subrecipients however the activity was never recorded on the financial reports to the Association or in their annual financial statement. * Cause: The Association hired a contract accountant to close the fiscal year-end and prepare the SEFA for audit and reporting. However, there were material errors to the SEFA primarily subrecipient pass-through amounts that were not disclosed on the original SEFA. Additionally, allocations of grant receipts and misapplied and LATCF funds were reported as expended when Council made no determination for those funds yet. * Effect or Potential Effect: The Association was not in compliance with Federal Single Audit Reporting requirements. * Questioned Costs: None * Context: During review of the SEFA presented for audit, it was indicated that there were no grants being passed through to other organizations for FY23. It was noted subsequently by the new contract accountant when preparing the FY24 year-end close and audit documentation. * Identification of Repeat Finding: 2022-004 * Recommendation: We recommend that management hire a contract accountant more familiar with federal single audits of tribes and applicable funding in Alaska. We also recommend the contract accountant provide training and instruction on elements of the SEFA to include subrecipient passthrough monitoring and related funds that may or may not be going directly to the subrecipient. * Views of Responsible Officials: See Corrective Action Plan

2023-003 Subrecipient Monitoring and Reporting - Material Weakness in Internal Control over Compliance and Noncompliance * Identification of Federal Programs: 14.862 Indian Community Development Block Grant * Criteria: There are various federal pass-through programs that the Association administers. When the Association receives these grants and passes them through to a subrecipient, the Association is required to complete subrecipient monitoring procedures. * Condition: The Association receives reports from the subrecipients however the activity was never recorded on the financial reports to the Association or in their annual financial statement. * Cause: The Association hired a contract accountant to close the fiscal year-end and prepare the SEFA for audit and reporting. However, there were material errors to the SEFA primarily subrecipient pass-through amounts that were not disclosed on the original SEFA. Additionally, allocations of grant receipts and misapplied and LATCF funds were reported as expended when Council made no determination for those funds yet. * Effect or Potential Effect: The Association was not in compliance with Federal Single Audit Reporting requirements. * Questioned Costs: None * Context: During review of the SEFA presented for audit, it was indicated that there were no grants being passed through to other organizations for FY23. It was noted subsequently by the new contract accountant when preparing the FY24 year-end close and audit documentation. * Identification of Repeat Finding: 2022-004 * Recommendation: We recommend that management hire a contract accountant more familiar with federal single audits of tribes and applicable funding in Alaska. We also recommend the contract accountant provide training and instruction on elements of the SEFA to include subrecipient passthrough monitoring and related funds that may or may not be going directly to the subrecipient. * Views of Responsible Officials: See Corrective Action Plan