Audit 399694

2023-002 Implement Controls and Documentation Over Procurement Federal Program Information Federal Agency: U.S. Department of the Interior Award Name: Natural Resource Stewardship Assistance Listing Number(s): 15.944 Award Year: 2023 Compliance Requirement: Procurement Type of Finding Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires that grant recipients follow procurement procedures for the acquisition of property or services under a federal award. Grantees are required to comply with certain procurement standards as defined in 2 CFR 200.318. These standards include the requirement that the grantee must use its own documented procurement procedures provided that they conform to applicable federal law. In addition, the grantee must maintain records sufficient to detail the history of procurement. Condition and Context During planning procedures for our audit, we concluded that the prior year finding over procurement was not yet remediated. Based on our procedures, there was no supporting documentation retained for those transactions subject to procurement and approvals were not formally documented. In addition, no evidence was provided to prove a suspension and debarment check was performed. Cause The Organization did not have adequate policies or controls in place to maintain formal evidence of vendor approval. Effect or Potential Effect Due to the weakness in internal controls and compliance finding noted above, there is a risk that contracts may be awarded to vendors in a manner that is not consistent with Federal procurement requirements. Questioned Costs Due to the condition noted above, Federal procurement requirements were not followed and resulted in the following questioned costs. AL Number(s) Name of Federal Program Questioned Costs 15.944 Natural Resource Stewardship $37,539 Recommendation The Organization should address the weaknesses in internal controls noted above in order to ensure that federal procurements are conducted in accordance with federal requirements and supporting documentation is maintained to support such conclusion. The Organization should ensure that prior to entering into transactions, a review is performed over vendor selection, and all required documentation is retained. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

2023-003 Improve Controls Over Cash Management and Application of Indirect Cost Rate Federal Program Information Federal Agency: U.S. Department of the Interior Award Name: Natural Resource Stewardship; Cooperative Research and Training Programs – Resources of the National Park System Assistance Listing Number(s): 15.944, 15.945 Award Year: 2023 Compliance Requirement: Cash Management, Allowable Costs/Cost Principles Type of Finding Internal Control Over Compliance – Significant Deficiency Criteria or Specific Requirement Management of the Organization is responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a Federal program on a timely basis. Management of the Organization is also responsible for applying the indirect cost rate appropriately. Condition and Context There is no documented review of requests for reimbursement by an individual that is not involved with preparing the requests. One individual is both preparing and reviewing requests for reimbursement with no additional documented oversight. As a result, there is also no review over the application of the indirect cost rate prior to requests for reimbursement. While assistance listing number 15.945 was not tested as a major program during the year, we confirmed that the control over cash management and application of the indirect cost rate was not remediated during the fiscal year for the program. Cause The Organization did not have adequate controls in place to ensure approval over reimbursement requests prior to submission to the federal agency, including application of the indirect cost rate. Effect or Potential Effect Due to the weakness in internal controls noted above, there is a risk that amounts requested to be reimbursed under federal awards could not be allowable or in accordance with applicable cost principles, including application of the indirect cost rate. No questioned costs are reported as this is an internal control over compliance finding. Recommendation The Organization should address the weaknesses in internal controls noted above by requiring two individuals to be involved in requesting reimbursements, and that the review and oversight of reimbursement requests and application of the indirect cost rate be documented. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.

2023-004 Improve Controls Over Reporting Federal Program Information Federal Agency: U.S. Department of the Interior Award Name: Natural Resource Stewardship Assistance Listing Number(s): 15.944 Award Year: 2023 Compliance Requirement: Reporting Type of Finding Compliance Internal Control Over Compliance – Material Weakness Criteria or Specific Requirement Per OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) and program requirements, recipients must submit accurate annual Federal Financial Reports (SF-425) and annual performance reports grouped by task agreement. Reports must be supported by underlying financial records and be subject to adequate review and oversight prior to submission. Condition and Context During our audit, we tested a sample of two SF-425 reports submitted for the period 10/1/2022 – 9/30/2023. Of both reports tested, the amounts reported as expenditures did not agree with the underlying general ledger detail. The amounts reported reflected cumulative drawdowns to the reporting date, not the actual expenditures incurred, as required. Further, there was no evidence of a formal review or approval of the SF-425 reports prior to their submission. Additionally, we tested a sample of two annual performance reports and found that these were also submitted without evidence of formal review or approval prior to submission. Cause The Organization did not have established procedures or control activities to ensure reported expenditures on the SF-425 are based on actual expenditures per the general ledger, and all required reports are formally reviewed and approved prior to submission. Effect or Potential Effect Due to the weakness in internal controls noted above, there is a risk that reporting cumulative drawdowns rather than actual expenditures on the SF-425 can result in inaccurate financial information being provided to the federal awarding agency, which may impact program oversight and compliance. The lack of formal review increases the risk of errors and misreporting in both financial and performance reports. Recommendation The Organization should develop and implement procedures to ensure that amounts reported on the SF-425 are reconciled to the general ledger and reflect actual expenditures incurred. Additionally, all SF-425 and annual performance reports should be subject to documented review and approval by management prior to submission to the federal awarding agency. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.