Audit 375849

Finding 2022-002: Lack of documentation of review and approval - Material Weakness Program name: Office for Coastal Management Assistance Listing: 11.473 Federal award Identification number: 20 NFWF 339630 Federal award year: 9/1/2020 - 8/31/2023 Federal awarding agency: U.S. Department of Commerce Criteria - In accordance with 2 CFR 200.303, recipients and subrecipients must establish, document and maintain effective internal control over Federal awards. These controls should be in compliance with Federal statutes, regulations, and the terms and conditions of the award, and should align with standards such as the “Standards for Internal Control in the Federal Government” (Green Book) or the COSO framework. This includes controls over: * Payroll: Ensuring labor charges are accurate, allowable, and properly approved (2 CFR 200.430). * Expenses: Ensuring proper documentation and approval. (2 CFR 200.400(d) ) * Reporting: Ensuring financial reports are accurate, complete, and reviewed prior to submission (2 CFR 200.328). Condition - The Organization has limited written processes of certain transaction classes. There was a pervasive lack of documentation of approval over transactions, including payroll, expenses, and reporting. Cause - The Organization did not maintain or consistently apply documentation protocols for internal control reviews. Formal documentation practices were not in place during the audit period. Effect - Lack of documentation as evidence that controls over compliance were being performed. Documentation should be maintained as evidence that sufficient control activities are in place and would effectively prevent or detect and correct noncompliance. Controls must be followed for every transaction and documentation of the control being performed must be maintained. Questioned costs - None identified. Perspective - The deficiency was pervasive across multiple compliance areas and was not isolated to a specific transaction or department. The scope indicates a systemic control weakness during the audit period. Identification of Repeat Findings - This is not a repeat finding. Recommendation - We recommend that the Organization ensure updated policies and procedures are implemented and consistently applied. This includes: * Documented review and approval of all transactions related to payroll, expenses, and reporting. * Maintenance of written evidence supporting such reviews. * Regular training and internal monitoring to ensure control procedures are consistently followed. Management response - See corrective action plan

Finding 2022-003: Procurement - Significant Deficiency Program name: Office for Coastal Management Assistance Listing: 11.473 Federal award Identification number: 20 NFWF 339630 Federal award year: 9/1/2020 - 8/31/2023 Federal awarding agency: U.S. Department of Commerce Criteria - Per 2 CFR 200.318 (i), recipients and subrecipients must maintain records sufficient to detail the history of each procurement. These records must include: rationale for the method of procurement; selection of contract type; contractor selection or rejection, and; basis for the contract price. Additionally, 2 CFR 200.318(a) requires entities to maintain and use documented procurement procedures that are consistent with applicable laws and regulations. Condition - The Organization has a written procurement policy in place; however, it was unable to provide documentation demonstrating that procurement transactions during the audit period were conducted in accordance with that policy. Specifically, the auditee did not retain records detailing the procurement method used, contractor selection rationale, or price justification for sampled transactions. Cause - The Organization did not maintain or consistently apply documentation protocols for internal control reviews. Formal documentation practices were not in place during the audit period. Effect - Without sufficient documentation, the auditee cannot demonstrate compliance with Federal procurement standards. This increases the risk of noncompliance with Uniform Guidance requirements and may result in unallowable costs or questioned costs. Questioned costs - None identified. Perspective - The deficiency was pervasive across multiple procurement transactions. Identification of Repeat Findings - This is not a repeat finding. Recommendation - We recommend that the Organization strengthen its internal controls over procurement by:  Ensuring all procurement transactions are documented in accordance with 2 CFR 200.319(i).  Training staff on documentation requirements.  Periodically reviewing procurement files for completeness and compliance. Management response - See corrective action plan.