Audit 380325

Finding 2024-002 – Delta Regional Authority ( material weakness): Criteria – Federal regulations governing effective control and accountability for all funds, property, and other assets, and must adequately track and report grant-specific financial data. (2 CFR 200.302b) Condition —Non-compliance was noted as described in the context below. Questioned Costs — N/A Context - We noted deficiencies in the School’s financial management system related to the recording, reconciliation, recordkeeping, reporting, and extraction of grant-related data: • Expenditures charged to the Federal grants and funds received were not consistently or clearly recorded in the general ledger using grant-specific identifiers or cost centers. • Monthly reconciliations between the general ledger and grant reports were either not performed or documented. • The organization lacked a consistent process for extracting accurate and complete financial data specific to the grant for monitoring and reporting purposes. Cause – The deficiencies appear to be due to the absence of standardized internal control procedures specific to federal grant tracking and reporting, as well as limited training for staff responsible for federal grant compliance. Effect – Failure to maintain proper financial records and reporting processes may result in noncompliance with Uniform Guidance requirements, misstatement of grant-related financial activity, and potential questioned costs. It also limits the organization’s ability to provide accurate and timely financial data to funding agencies and internal stakeholders. Auditor’s Recommendation – We recommend the organization implement the following corrective actions: 1. Establish and consistently apply a grant-specific coding structure in the general ledger to clearly identify grant transactions. 2. Perform and document monthly reconciliations between the general ledger and grant financial reports. 3. Develop a standardized grant file structure for retaining supporting documentation. 4. Train staff involved in grant management on Uniform Guidance financial management requirements. 5. Implement a data extraction and reporting process that ensures accuracy and completeness for federal grant reporting. 6. Consider adding a grants accountant to oversee grant accounting and compliance. This will help reduce the burden over this area for the current staff. In addition to adding a grants accountant, a consultant may also be used to assist in developing proper procedures and controls to implement and follow moving forward.