Audit 399880

Allowable Costs Federal Agency: U.S. Department of Transportation Federal Program: Formula Grants for Rural Areas Assistance Listing Number: 20.509 Award Period: 1/1/2025 – 12/31/2025 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Per Uniform Guidance 200.214 Allowable Costs, the Organization is subject to allowable cost principles, which restrict expenditures within certain guidelines within federal assistance programs or activities. Condition: We noted a pay rate was entered incorrectly in the payroll system resulting in overpayment of payroll. Questioned Costs: $104 Context: For a sample of 40 payroll disbursements tested, we noted a pay rate was entered incorrectly for two employees. Cause: There was a keying error when pay rates were entered into the payroll system Effect: An employee was overpaid for six months until the next pay rate increase went into effect. Repeat Finding: No Recommendation: We recommend the Organization revise its procedures to include approval over payroll change report at least on a semi-annual basis. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding.

Procurement Federal Agency: U.S. Department of Transportation Federal Program: Formula Grants for Rural Areas Assistance Listing Number: 20.509 Award Period: 1/1/2025 – 12/31/2025 Type of Finding: Significant Deficiency in Compliance, Other Matters Criteria or Specific Requirement: Per Uniform Guidance 200.318 Procurement Standards, the Organization is subject to standards of conduct covering conflicts of interest in the selection, award, and administration of contracts. Condition: The Organization’s conflict of interest policy does not state specific guidelines for entering into contracts, nor does it state the disciplinary actions to be applied for violations by its employees, officers, agents, or board members. Questioned Costs: None Context: Conflict of interest policy does not align with requirements of federal procurement standards. Cause: Conflict of interest policy has not been reviewed in recent years. Effect: May cause federal expenditures to be out of compliance with federal regulations. Repeat Finding: No Recommendation: We recommend the Organization revise its conflict of interest policy to align with federal procurement standards. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding.