Audit 410289

Department of Agriculture, Federal Financial Assistance Listing 10.720, 24-DG-11010013-052, 2025 Infrastructure Investment and Jobs Act Community Wildfire Defense Grant Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: Management prepared the schedule for the year ended December 31, 2025. As auditors, we made material adjustments to two of the four programs listed on the schedule. Additionally, there was no formally documented review or approval over the client prepared schedule. Cause: Controls that were in place did not detect the errors on the schedule. Effect: There is a reasonable possibility that the misstatements to the schedule may not be prevented and detected in a timely manner. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend the Cooperative implement a formal control process over the preparation of the schedule. Views of Responsible Officials: Management partially agrees with the finding, see corrective action plan.

Department of Agriculture, Federal Financial Assistance Listing 10.720, 24-DG-11010013-052, 2025 Infrastructure Investment and Jobs Act Community Wildfire Defense Grant Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.328 requires the auditee to submit financial reports as required by the federal award. SF-425 instructions note for reports prepared on an accrual basis, expenditures reported are the sum of cash disbursements for direct charges for property and services; the amount of indirect expense incurred; and the net increase or decrease in the amounts owed by the recipient. Condition: Amounts reported on the federal share of expenditures line (Line 10e) did not agree to the cooperative’s records for the applicable reporting period. Cause: The Cooperative prepared the report as instructed by the Forest Service grants manager. Effect: Federal expenditures for the reporting period were understated by a material amount. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 2 out of 4 quarterly reports were selected for testing. Repeat Finding from Prior Year: No Recommendation: We recommend that management review the federal grant reporting requirements to ensure amounts reported are in compliance with reporting instructions and agree to the underlying accounting records. Views of Responsible Officials: Management disagrees with the finding, see corrective action plan.