Audit 369256

Finding type: Significant deficiency in internal control over financial reporting and significant deficiency in internal control over compliance. Criteria and Condition: Internal controls should include documented review and approval of expenditures to ensure that expenses are accurate, properly authorized, and compliant with organizational policies and grant requirements. During our testing, we noted some expenditures (4 of 25 tested) were processed and recorded without documented evidence of review or approval by management. Cause: The Organization has not established or enforced procedures requiring consistent documentation of review and approval for expenditures. Effect: Without documented review, there is an increased risk of errors, unauthorized spending, or noncompliance with grant terms going undetected. This weakens the Organization's control environment and may compromise financial reporting reliability. Recommendation: We recommend the Organization consistently follow procedures requiring documented review and approval of all expenditures, whether through manual sign off or system based electronic approvals, to strengthen internal controls and accountability. Response: Management will document the review and approval of all expenditures.

Significant Deficiency in Internal Control Over Financial Reporting and Significant Deficiency in Internal COntrol Over Compliance. Criteria and Condition: The processing and recording of cash receipts and disbursements should be segregated among different individuals to reduce the risk of errors or irregularitites. During our testing, we noted that the fiscal agent is responsible for both processing and recording these transactions. Cause: The Organization has limited staffing which restricted it ability to segregate financail responsibilities. Effect: A lack of segregation of duties over cash receipts and disbursements increases the risk that errors or misappropriations may occur and not be detected in a timely manner. Recommendation: We recommend the Organiation work with the fiscal agent to ensure that responsibilities for processing and recording cash receipts and disbursements are segregated among different individuals. If staffing limitations prevent this, compensating controls should be implemented. Response: Management will work with the fiscal agent to strengthed controls by ensuring more than one employee is involved in processing and recording cash transactions. In addition, management will provide board oversight through periodic review of financial activity. Conclusion: Response accepted.

Noncompliance/Material Weakness Criteria and Condition: Under 45 CFR Part 75.512, the Uniform Guidance requires that audits are submitted earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period. Northeast Iowa Workforce Development Board did not complete and submit their audit for the year ended June 30, 2024 to the federal clearinghouse until after the March 31, 2025 deadline. Cause: The audit did not commence until after ther nine-month submission deadline had passed. Effect or potential effect: The late filing could potentially impact future funding from government agencies. Questioned Costs: None. Context: The June 30, 2024 single audit reporting package was filed late with the Federal Audit Clearinghouse. Recommendation: We recommend management implement processes and controls that will ensure future audits are completed and submitted timely. Response: Management will ensure all requested information is available for the auditor in order to facilitate timely completion of the audit by March 31. Conclusion: Response accepted.