Criteria – 2 CFR 200.303 requires the recipient to establish, document, and maintain effective internal control over federal awards. Condition – The Organization has a documented fiscal policy; however, the policy does not include procedures that cover all related specific compliance attributes associated with federal award requirements. Context and Cause – The Organization’s current policies do not include a review of the fiscal policy for required changes on a scheduled basis. Effect of Condition – Incomplete documentation of policies regarding federal compliance could prevent management and the Board from providing adequate oversight over compliance activities of the Organization, and could result in non-compliance with federal awards. Questioned Cost – None. Recommendation – We recommend the Organization develop, document, and implement policies and procedures that address the recent guidance regarding applicable federal compliance requirements. Views of Responsible Officials and Planned Corrective Actions – Management concurs with the finding and has developed a corrective action plan. The material weakness is in internal controls over compliance, and not a compliance finding. We will work to increase the strength of our documented internal controls over compliance and address individual compliance attributes.
Criteria – Federal regulations (2 CFR 200.302 and 2 CFR 200.303) require recipients of federal awards to maintain effective internal controls over federal programs and financial transactions to provide reasonable assurance that expenditures are properly authorized, allowable, and in compliance with applicable program requirements. Sound internal control practices include independent review and approval of invoices prior to payment and recording. Condition – During testing of expenditures charged to the federal program, it was noted that invoices were processed and recorded by the accounting staff without documented evidence of review and approval by an individual independent of the recording function. The Organization did not maintain documentation demonstrating supervisory approval of invoices prior to payment. Context and Cause – The Organization has not implemented a formal policy requiring documented review and approval of invoices by personnel independent of the accounting function responsible for recording transactions. Effect of Condition – Without documented independent approval, there is an increased risk that unallowable, unsupported, inaccurate, or unauthorized expenditures could be charged to the federal program without timely detection. Questioned Cost – None. Recommendation – Management should establish and implement procedures requiring all invoices to be reviewed and approved by an authorized individual independent of the employee responsible for recording the transaction. Evidence of approval should be documented and retained with the supporting invoice documentation. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding and will implement procedures requiring documented supervisory review and approval of invoices prior to payment and recording. Documentation of approvals will be retained with the payment records to strengthen internal controls over federal expenditures.
Criteria – Pursuant to 2 CFR 200.302 and 2 CFR 200.303, recipients of federal awards are required to establish and maintain effective internal controls over federal funds. Appropriate internal controls over cash management include independent review and approval of cash draw requests to ensure drawdowns are accurate, supported, and limited to immediate cash needs. Condition – During our testing of cash draw requests, we noted the Organization did not maintain documented evidence of an independent review and approval of cash draw requests. Cash draw requests were prepared and submitted by the accounting employee responsible for recording the related accounting transactions, with no documented review by another authorized individual. Context and Cause – The Organization has not established procedures requiring documented independent review and approval of cash draw requests before submission. Effect of Condition – The lack of independent review increases the risk that cash draw requests may contain errors, unsupported amounts, or drawdowns that do not comply with federal cash management requirements. Such errors may not be detected in a timely manner. Questioned Cost – None. Recommendation – Management should implement procedures requiring all cash draw requests to be reviewed and approved by an individual independent of the employee preparing and recording the transaction. Evidence of the review and approval should be documented and retained with the draw request documentation. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding and will implement procedures requiring documented supervisory review and approval of all cash draw requests prior to submission. Supporting documentation and evidence of approval will be retained to demonstrate compliance with established internal control procedures.
Criteria –Non-federal entities are prohibited from contracting with parties that are suspended or debarred from doing business with the federal government per 2 CFR 200.14. When a non-federal entity enters into a contract they must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. Condition –During the audit, two procurements made during the year ending December 31, 2025 were tested. The testing showed that the Organization did have a Procurement Policy in place and was following their own guidelines for the procurements tested. However, the entities that were awarded the contracts were not verified to be not suspended or debarred from participating in the transaction due to federal funding. Retroactively, the names of the two entities were searched and confirmed not to be suspended or debarred from participating in the transactions. Context and Cause – While procedures were in place to appropriately procure goods and services, there were no procedures in place to ensure that the awarded entity was not suspended or debarred from doing business with the federal government. Effect of Condition – The Organization could have entered into a contract with an entity that was prohibited from receiving federal funds, resulting in noncompliance of federal award requirements. Questioned Cost – None. Recommendation –We recommend that the Organization implement the necessary internal controls to ensure that, for each procurement entered into using federal funds, the entity is verified or certified as not being suspended or debarred from participating in the transaction. This can be accomplished by searching the entity's name in the exclusions database at SAM.gov, obtaining a certification from the entity, or including a clause or condition related to suspension and debarment in the contract with the entity. Views of Responsible Officials and Planned Corrective Actions –Management concurs with the finding and will implement effective internal controls to ensure that contracts utilizing federal funds are not awarded to entities that are suspended or debarred from the transaction.