Federal Agency: U.S. Department of Agriculture Federal Program Name: Partnerships for Climate-Smart Commodities Assistance Listing Number: 10.937 Federal Award Identification Number and Year: NR233A750004G064 - 2023 Award Period: 7/20/2023-6/30/2028 Type of Finding: Significant Deficiency in Internal Control over Compliance Compliance Requirement: Allowable Costs and Activities Criteria or specific requirement: Standards require that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: Of the 40 payroll disbursements selected for testing, noted 31 did not have documentation of an approved pay rate, all did not have a formal review and approval documented over the payroll registers to verify completeness and accuracy, and 37 did not have a formal review and approval documented over the payroll for time and effort documentation. Questioned costs: None Context: Of the 40 payroll disbursements selected for testing, noted 31 did not have documentation of an approved pay rate, all did not have a formal review and approval documented over the payroll registers to verify completeness and accuracy, and 37 did not have a formal review and approval documented over the payroll for time and effort documentation. Per testing, noted no employee charges more than 100% of their time across federal funding or other funding sources. Cause: Due to growth of the Organization, they did not have a formal procedure to retain documentation of the review and approval over effective payrates, payroll registers or time and effort documentation. Effect: Errors or intentional fraud could occur and not be detected timely by other employees in the normal course of their responsibilities. Repeat Finding: No Recommendation: We recommend the Organization implement a compensating control to formally document their review and approval over payrates, payroll registers and time & effort studies. This review would include comparing the payroll processed and allocated to the grant to the approved time and effort documentation by funding source to ensure payroll costs are not being overcharged. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Agriculture Federal Program Name: Partnerships for Climate-Smart Commodities Assistance Listing Number: 10.937 Federal Award Identification Number and Year: NR233A750004G064 - 2023 Award Period: 7/20/2023-6/30/2028 Type of Finding: Significant Deficiency in Internal Control over Compliance Compliance Requirement: Cash Management and Matching Criteria or specific requirement: Grant claims filed by the Organization to granting agencies must be accurate, reconcile to the Organizations general ledger system and for cost-reimbursable grants, represent costs incurred. Internal controls should be signed and implemented to prevent and detect errors in the data reported on the grant claims. Segregation of duties is an internal control intended to prevent or decrease to occurrence of errors or intentional fraud. Segregation of duties ensure that no single employee has control over all phases of a transaction. There should be a secondary review of each grant claim prior to being certified and filed to ensure that there are no errors, irregularities, or misrepresentations. Condition: Of the 5 claims for reimbursement selected for testing, noted 4 did not have a formal review documented by someone other than the preparer. Accordingly, this does not allow for a proper segregation of duties for internal control purposes over the cash management compliance requirement. When testing matching, the two claims that were tested included an indirect match that was not reported correctly, although the matching requirement was met. Questioned costs: None Context: While performing audit procedures, it was noted that four of five grant claims tested that were submitted for reimbursement did not have formal documentation of review by someone other than the preparer. Cause: Due to limited personnel, the Organization had not implemented formal controls related to reimbursement requests. Effect: There could be the possibility that the client would over- or under-report certain items for reimbursement on claims if there are no reviews in place. Repeat Finding: No Recommendation: We recommend the Organization implement a formal control where someone other than the preparer document their review of the claim prior to submitting to the federal agency. This review would include comparing the amounts in the report to the general ledger or other supporting documents. This review should be supported by documenting the signature and date prior to submission. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Agriculture Federal Program Name: Partnerships for Climate-Smart Commodities Assistance Listing Number: 10.937 Federal Award Identification Number and Year: NR233A750004G064 - 2023 Award Period: 7/20/2023-6/30/2028 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Compliance Requirement: Procurement, Suspension and Debarment. Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Organization should have policies and procedures in place to following in relation to procurement, suspension, and debarment. Condition: During our testing, we noted that the Organization did not implement a formal procurement policy or suspension and debarment policy to follow but instead followed each federal agencies policies as part of the federal award. During our testing, we noted the Organization did not have adequate internal controls designed to ensure vendors were not suspended or debarred. Questioned costs: None Context: While performing audit procedures, it was noted that the Organization did not implement a formal procurement policy along with no separate policies for suspension and debarment. During our testing, it was noted that the Organization did not maintain documentation over verification the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration prior to entering into a signed contract. Cause: The Organization follows regulations implemented by each federal contract and works with the federal agency contact to ensure compliance with purchasing. The Organization did not implement entity-wide procedures and policies to be followed in accordance with the Uniform Guidance for procurement, suspension, and debarment. Effect: The auditor noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend that the Organization implement a procurement policy that addresses the five procurement methods allowed under Uniform Guidance. Internal controls should be implemented to make sure procurement methods are properly followed and documentation is maintained. We recommend the Organization develop and implement controls to ensure compliance with suspension and debarment requirements and keep an electronic or manual file indicating that such review was done to verify that they are following compliance requirements. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Agriculture Federal Program Name: Partnerships for Climate-Smart Commodities Assistance Listing Number: 10.937 Federal Award Identification Number and Year: NR233A750004G064 - 2023 Award Period: 7/20/2023-6/30/2028 Type of Finding: Significant Deficiency in Internal Control over Compliance Compliance Requirement: Reporting and Matching Criteria or specific requirement: Grant reports filed by the Organization to granting agencies must be accurate and complete by reconciling to the Organizations financial reports and accounting records. Internal controls should be signed and implemented to prevent and detect errors in the data reported on the grant reports. Segregation of duties is an internal control intended to prevent or decrease to occurrence of errors or intentional fraud. Segregation of duties ensure that no single employee has control over all phases of a transaction. There should be a secondary review of each grant report prior to being certified and filed to ensure that there are no errors, irregularities, or misrepresentations. Condition: Of the two financial reports and two performance reports tested, there was no formal review documented by someone other than the preparer. Accordingly, this does not allow for a proper segregation of duties for internal control purposes over the reporting compliance requirement. When testing matching, the two financial reports that were tested did not report the correct amount for the indirect match incurred as part of the federal award. Questioned costs: None Context: No instance of noncompliance with the matching requirement, however during our testing of two financial reports, the Organization incorrectly reported the amount of the match incurred as part of the federal award. Of the two financial reports and two performance reports tested, there was no formal review documented by someone other than the preparer who submitted and certified the report. Cause: Due to limited personnel, the Organization had not implemented formal controls related to grant reports Effect: There could be the possibility that the client would over- or under-report certain items for reimbursement on claims if there are no reviews in place. Repeat Finding: No Recommendation: We recommend the Organization implement a formal control where someone other than the preparer documents their review of the financial and performance reports prior to submitting to the federal agency. This review would include comparing the amounts in the report to the general ledger or other supporting documents. This review should be supported by documenting the signature and date prior to submission. Views of responsible officials: There is no disagreement with the audit finding.