Finding 2025-001 –Procurement , Suspension & Debarment Material Weakness in Internal Control over Compliance 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 200.318 maintains that recipients must have and use documented procurement policies and must conform to the procurement standards in sections 200.317 through 200.327. These standards generally require recipients to maintain records sufficient to detail the history of procurement, including the rationale for the procurement method, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: Testing of the federal program identified the following: • The Organization failed to document price comparisons including the rationale or circumstances leading up to the selection of the non-competitive sole source procurement. The Organization did follow through with the suspension and debarment check of the contracted vendor. Cause: The Organization lacked adequate documentation of procurement decisions being reached during the initial project funding phase. Effect/Potential Effect: Ineffective controls over this area of compliance could result in a reasonable possibility the Organization would be noncompliant with the compliance requirements outlined above. Questioned Costs: None reported. Context / Sampling: A statistical sample of 1 out of 3 vendors selected for testing.
Finding 2025-002 –Limited Segregation of Duties Significant Deficiency in Internal Control over Financial Reporting and Compliance Criteria: Uniform Guidance requires non-Federal entities to establish and maintain effective internal controls over financial reporting and compliance. Condition: The auditors noted one signature on sampled checks related to project vendor payments. Although there was evidence of oversight over the requisition packets submitted to the Pennsylvania Broadband Development Authority (the Agency) for reimbursement, we did not identify adequate segregation of duties among personnel responsible for submitting requisitions, performing accounting, recordkeeping, and bank reconciliation functions, and handling the receipt and application of federal funds against outstanding loan balances. Cause: The Organization lacked adequate segregation of duties due to limited staff. Effect/Potential Effect: Unauthorized purchases or fraudulent disbursements could occur that could go undetected. Lack of segregation of duties could result in a financial statement misstatement by error or fraud that could go undetected by the management. Questioned Costs: None reported. Context / Sampling: Sampled atleast five canceled check payment images for signatures.