Audit 402388

Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Additionally, per 2 CFR §200.403 and §200.302, costs charged to federal awards must be allowable, allocable, and properly documented, and financial reporting must be accurate, complete, and supported by the accounting system. Condition: Although the Parish has implemented internal controls related to the allowability of costs and the preparation of required reports for the Coronavirus State and Local Fiscal Recovery funds, they were not operating effectively during fiscal year 2024. Tests of controls indicated that transactions were not tracked appropriately to ensure they were charged to the correct funding source. In addition, quarterly project and expenditure reports submitted to the U.S. Treasury included inaccurate or unsupported information due to a lack of tracking and reconciliation procedures. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel. Parish administration and management were immediately tasked with enhancing operations related to procedural concerns from the prior administration and performing the accounting function without sufficient documentation on several balances and transactions. The documented controls were not in practice because of this. Effect: While no instances of noncompliance were noted, the lack of documented controls in practice increases the risk that future required reports could be incomplete, inaccurate, or untimely, as well as, federal costs being unallowed per the cost principles which could potentially result in program noncompliance. Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001, to prevent noncompliance of the Uniform Guidance as required. Views of responsible officials: See management’s responses to findings on Page 116.

Criteria: In accordance with 2 CFR § 200.331, a non-federal entity that passes federal awards to subrecipients is responsible for 1) evaluating each subrecipient’s risk of noncompliance, 2) monitoring the activities of subrecipients to ensure that the subaward is used for authorized purposes, in compliance with laws and the terms and conditions of the subaward, and 3) verifying that subrecipients have audits in accordance with the Uniform Guidance, if applicable. Adequate internal controls are required to ensure compliance with these requirements under 2 CFR § 200.303. Condition: During our audit, we noted that the Parish did not have sufficient internal controls in place to ensure effective subrecipient monitoring. Specifically, there was no documented risk assessment of subrecipients prior to issuing subawards, the Parish did not perform periodic reviews or site visits to monitor subrecipient performance or compliance, and the subrecipient audit reports were not consistently obtained or reviewed. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel. Parish administration and management were immediately tasked with enhancing operations related to procedural concerns from the prior administration and performing the accounting function without sufficient documentation on several balances and transactions. The documented controls were not in practice because of this. Effect: Failure to properly monitor subrecipients increases the risk that federal funds may be misused or not spent in accordance with program requirements to achieve program objectives. It also exposes the Parish to potential liability for questioned costs incurred by subrecipients to be repaid to the federal agency. Recommendation: We recommend that the entity establish and implement formal policies and procedures for subrecipient monitoring in accordance with 2 CFR § 200.331. This should include conducting and documenting pre-award risk assessments, developing a subrecipient monitoring plan (e.g., site visits, desk reviews), reviewing subrecipient performance and audit reports on a regular basis. Views of responsible officials: See management’s responses to findings on Page 116