Audit 368458

2024-002 Procedures for Match Requirements – Significant Deficiency Criteria: In accordance with 2 CFR 200.306, recipients must provide required cost sharing or matching as stipulated in the award. Additionally, 2 CFR 200.302(b)(7) requires nonfederal entities to have written procedures to ensure compliance with the terms and conditions of federal awards, including matching requirements. Condition: During our audit, we noted that Mountain Home does not have written policies and procedures in place to ensure compliance with the federal grant’s matching requirement. While management tracks matching expenditures, there is no documented process describing how matching costs are identified, recorded, reviewed, or monitored for compliance. Cause: Undetermined. Effect: Without documented policies and procedures, there is an increased risk that matching requirements may not be met, that ineligible costs could be charged as match, or that insufficient documentation may exist to support amounts reported to the granting agency. This could lead to questioned costs, disallowance of claimed matching contributions, or potential noncompliance with federal grant requirements. Recommendation: We recommend that management develop and implement written policies and procedures that describe the process for identifying, tracking, and reviewing matching expenditures.