Audit 362115

Department of the Treasury, Passed through the State of Michigan Federal Financial Assistance Listing 21.029, CPFFN0190, 2024 COVID-19 – Coronavirus Capital Projects Fund Reporting Material Weakness in Internal Control over Compliance Criteria – A good system of internal accounting control contemplates an adequate system for review of the quarterly submissions. Condition – During the course of our engagement, we noted that the Cooperative has no formal review process for the quarterly reports, which could result in a material misstatement of the Cooperative’s schedule of expenditures of federal awards. Cause – The Cooperative does not have an internal control system designed to review the quarterly submissions. Effect – This deficiency could result in a misstatement to the quarterly reports and noncompliance with federal awards that would not be prevented or detected. Questioned Costs – None reported. Context/Sampling – Overall reporting process. Repeat Finding from Prior Year(s) – No. Recommendation – We recommend the Cooperative establish a review process prior to submission. This review should be done at the accounting supervisor levels. Views of Responsible Officials – There is no disagreement with the audit finding.

Department of the Treasury, Passed through the State of Michigan Federal Financial Assistance Listing 21.029, CPFFN0190, 2024 COVID-19 – Coronavirus Capital Projects Fund 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 – In our testing of procurement, suspension, and debarment it was identified that the Cooperative’s written policy did not address 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 compliant policies increases the overall risk of non-compliance. Questioned Costs – None reported. Context/Sampling – Overall procurement policy. Repeat Finding from Prior Years – No. Recommendation – We recommend that management establish a written policy that is in compliance with 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.

Department of the Treasury, Passed through the State of Michigan Federal Financial Assistance Listing 21.029, CPFFN0190, 2024 COVID-19 – Coronavirus Capital Projects Fund Reporting Material Weakness in Internal Control over Compliance Criteria – A good system of internal accounting control contemplates an adequate system for review of the quarterly submissions. Condition – During the course of our engagement, we noted that the Cooperative has no formal review process for the quarterly reports, which could result in a material misstatement of the Cooperative’s schedule of expenditures of federal awards. Cause – The Cooperative does not have an internal control system designed to review the quarterly submissions. Effect – This deficiency could result in a misstatement to the quarterly reports and noncompliance with federal awards that would not be prevented or detected. Questioned Costs – None reported. Context/Sampling – Overall reporting process. Repeat Finding from Prior Year(s) – No. Recommendation – We recommend the Cooperative establish a review process prior to submission. This review should be done at the accounting supervisor levels. Views of Responsible Officials – There is no disagreement with the audit finding.

Department of the Treasury, Passed through the State of Michigan Federal Financial Assistance Listing 21.029, CPFFN0190, 2024 COVID-19 – Coronavirus Capital Projects Fund 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 – In our testing of procurement, suspension, and debarment it was identified that the Cooperative’s written policy did not address 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 compliant policies increases the overall risk of non-compliance. Questioned Costs – None reported. Context/Sampling – Overall procurement policy. Repeat Finding from Prior Years – No. Recommendation – We recommend that management establish a written policy that is in compliance with 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.