Audit 369091

Finding 2024-001 Identification of the federal program: 21.027 – Coronavirus State and Local Fiscal Recovery Funds Noncompliance over allowable activities and allowable costs Criteria: Per the Uniform Guidance (2 CFR 200.430), compensation for personal services must be based on records that accurately reflect the work performed, and costs must be properly allocated to benefitting programs or cost objectives Condition: November’s secondary payroll distribution allocation was spread with incorrect amounts, resulting in costs being charged to the grants that were not allowable. Cause: The Cooperative decreased the sick accrual rate in November, but payroll personnel did not appropriately account for the rate change prior to spreading the amounts. Effect: As a result, costs that were not attributable to the grants were charged to them. Questioned Costs: $1,681 Recommendations: The Cooperative should implement a process to verify that changes affecting payroll allocations are accurately reflected before processing distributions to ensure compliance with allowable cost requirements. Views of responsible officials: Management concurs with the recommendation. A review process will be implemented to ensure that all payroll changes are properly reviewed, verified, and approved prior to final payroll processing.

Finding 2024-002: Identification of the federal program: 21.027 – Coronavirus State and Local Fiscal Recovery Funds Noncompliance over reporting and significant deficiency in internal controls Criteria: Cooperatives must ensure the periods covered in the quarterly reports are consistent with what is required per the grant agreements. Condition: The Cooperative reported its quarterly progress reports with a different period schedule than what was required. Cause: The Cooperative reported June-August information on its Q3 reports and September-November information on its Q4 reports. The grant agreements require Q3 to cover July-September and Q4 to cover October-December. Effect: Improper reporting may impact grantor oversight and delay funding decisions. Questioned Costs: None Recommendations: The Cooperative should ensure that quarterly reports align with the periods specified in the grant agreements to maintain compliance Views of responsible officials: Management concurs with the recommendation. A review process will be established to ensure that financial reports align with the periods specified in the grant agreements whenever possible. In instances where complete information is not available within the required reporting window (due timing of information and required deadlines), management will provide the most reliable and available data at the time of reporting. This will be clearly documented to ensure transparency with granting agencies.