Audit 370279

Finding 2024-001 Program Federal Assistance Listing and Title: 10.766 Community Facilities Loans and Grants Award Numbers: Unknown Federal Grantor: U.S. Department of Agriculture Pass-Through Agency: N/A Criteria: 2 CRF 200.303 Internal Controls requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. To minimize the risk of errors, internal controls should be in place for all program compliance requirements, including the preparation and deposits of loan and reserve payments, which should be reviewed and approved by a responsible party other than the original preparer. Condition/Context: There was not a review/approval performed of the reserve deposit and it’s entry for the loan. The sample was not statistically valid. Cause: There are not controls in place for a review and approval process of journal entries and deposits for the loan and reserve payments. Effect: Accounting software and/or reports could contain errors. Questioned Costs: None noted. Recommendation: The fire department should review its internal control procedures to ensure there is proper review and approval processes over completeness and accuracy of deposits and reserve payments, including documentation of that review. Management Response: The control deficiency has been discussed with the Department’s management and we acknowledge our responsibility for a review and approval process. The Board was aware that this condition existed and realizes that the concentration of duties and responsibilities in a limited number of individuals is not desirable from a control point of view. The Department is onboarding a Business Manager in a new position that will allow more segregation of duties. The Department has met with our Accountant to prioritize those duties that are important for segregation of accounting responsibilities.