2025-001 Finding – Federal Award Type: Audited Financial Statements Late Filing – Material Weakness in Controls Over Compliance and Noncompliance Criteria / Requirement: The Organization must ensure that financial information is filed by the reporting due dates pursuant to the requirements of its funders and the Federal Audit Clearinghouse. Condition / Context: The Organization did not file the audited financial statement and related reports before their specified due dates. Management did not meet the year-end reporting due dates required by funders and regulations. Cause: The filings were not performed timely, in part, due to turnover of top management in the Organization. Additionally, this was a first-year single audit and records were not maintained or were not maintained in an easily accessible manner in order to support the necessary compliance requirements. Effect: The year-end audited financial statements were not timely completed and filed by the regulatory due dates. Questioned Costs: None Recommendation: The Organization should review the program requirements and implement contingency plans to ensure that year-end reporting requirements are met. The Organization should establish clear, documented processes and procedures that address compliance requirements under Uniform Grant Guidance and can be consistently followed during management transitions. Management’s Response: Management concurs with the finding and has defined corrective action to address it.
2025-002 Finding – Federal Award Type: Material Weakness in Internal Control over Compliance – Financial Management Criteria / Requirement: In accordance with 2 CFR 200.303, non-Federal entities receiving Federal awards must establish and maintain effective internal control over Federal awards that provides reasonable assurance the awards are managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR 200.302 requires recipients to maintain financial management systems that adequately identify and account for Federal awards, support the preparation of required financial reports, and accurately track expenditures to demonstrate that Federal funds were used in accordance with applicable requirements. Condition / Context: The Organization tracked Federal expenditures charged to the grant using a workbook maintained outside of its accounting system. The accounting system was not configured or maintained to separately identify expenditures associated with the Federal award. Although most expenditures recorded in the external workbook could be reconciled to the general ledger, certain expenditures could not be traced to the accounting records. As a result, the accounting system did not provide a complete and reliable record of Federal expenditures. Cause: The Organization's financial management system was not designed or utilized to separately identify and track Federal expenditures within the accounting records. Instead, grant activity was maintained through an external workbook. Effect: The lack of an integrated financial management system increases the risk that Federal expenditures may be inaccurately recorded, charged to multiple Federal awards, include unallowable costs, or otherwise fail to comply with Federal requirements. In addition, management may be unable to demonstrate the completeness and accuracy of expenditures reported under the Federal award. Questioned Costs: None. Recommendation: We recommend the Organization modify its financial management system to separately identify and track Federal award expenditures within the accounting records. Management should discontinue reliance on external workbooks as the primary record of Federal expenditures and ensure the accounting system provides complete, accurate, and auditable records sufficient to support Federal financial reporting and compliance with Uniform Guidance requirements. Management’s Response: Management concurs with the finding and will implement effective internal controls over Financial Management
2025-003 Finding – Federal Award Type: Material Weakness in Internal Control over Compliance and Noncompliance – Allowable Costs Criteria / Requirement: In accordance with 2 CFR 200 Subpart E (Uniform Guidance), costs charged to a federal award must be reasonable, allocable, consistently treated, and adequately documented. In addition, 2 CFR 200.302 requires recipients to maintain financial management systems that adequately identify and support expenditures charged to Federal awards. Condition / Context: The Organization tracked Federal expenditures charged to the grant using a workbook maintained outside of its accounting system. During testing of payroll expenditures charged to the Federal award, we noted that payroll costs charged to the grant could not be identified within the general ledger because the allocations were made only within the external workbook. Although employee timesheets documented hours worked on projects related to the grant, the Organization was unable to demonstrate a direct reconciliation between the payroll amounts charged to the Federal award and the accounting records. In addition, the timesheets provided did not contain evidence of supervisory review or approval. Cause: As a result, the Organization lacked sufficient support to demonstrate that payroll costs charged to the Federal award were properly allocated, allowable, and adequately documented. This increases the risk that payroll expenditures may be inaccurately recorded, charged to multiple Federal awards, or otherwise fail to comply with Uniform Guidance requirements. Effect: The lack of an integrated financial management system increases the risk that Federal expenditures may be inaccurately recorded, charged to multiple Federal/ non-federal awards, include unallowable costs, or otherwise fail to comply with Federal requirements. Questioned Costs: $34,623 Recommendation: We recommend the Organization discontinue reliance on external workbooks as the primary record of Federal expenditures and record payroll allocations directly within the accounting system. Management should implement procedures to reconcile payroll expenditures charged to Federal awards to the general ledger and ensure that payroll allocations are supported by approved timesheets or equivalent documentation. Additionally, management should require and document supervisory review and approval of employee timesheets to strengthen internal controls over payroll costs charged to Federal awards. Management’s Response: Management concurs with the finding and will implement effective internal controls over Allowable Costs.
2025-004 Finding – Federal Award Type: Material Weakness in Internal Control over Compliance – Cash Management Criteria / Requirement: In accordance with 2 CFR 200.303, non-Federal entities receiving Federal awards must establish and maintain effective internal control over Federal awards that provides reasonable assurance the awards are managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR 200.302 requires recipients to maintain financial management systems that adequately identify and support expenditures charged to Federal awards. Further, 2 CFR 200.305 requires recipients to minimize the time elapsed between the transfer of Federal funds and their disbursement for program purposes. Condition / Context: Cash draw requests were prepared and submitted by a single employee without documented supervisory review or approval. The draw requests were supported by an external workbook rather than directly by the Organization's accounting system or general ledger. Consequently, the Organization did not have documented internal controls within the cash draw process to prevent or detect inaccurate or unsupported draw requests prior to submission. Cause: The Organization had not implemented procedures requiring supervisory review and approval of cash draw requests prior to submission. In addition, cash draw requests were prepared using information maintained outside of the accounting system rather than being supported directly by the general ledger. Effect: The lack of documented review and reliance on records maintained outside the accounting system increases the risk that cash draw requests may include inaccurate, duplicate, or unallowable expenditures or amounts that are not adequately supported by the accounting records. In addition, the Organization may draw Federal funds in advance of eligible expenditures, resulting in noncompliance with the cash management requirements of 2 CFR 200.305. Questioned Costs: None. Recommendation: We recommend the Organization implement formal internal controls over the cash management process, including documented supervisory review and approval of all cash draw requests prior to submission. Cash draw requests should be prepared and supported using information maintained within the accounting system and reconciled to the general ledger to ensure that only allowable, properly recorded Federal expenditures are included in reimbursement requests. Additionally, management should develop and implement a written cash management policy that establishes procedures for preparing, reviewing, approving, reconciling, documenting, and retaining cash draw records in accordance with the Uniform Guidance. Management’s Response: Management concurs with the finding and will implement effective internal controls over Cash Management.
2025-005 Finding – Federal Award Type: Material Weakness in Internal Control over Compliance and Noncompliance – Procurement Criteria / Requirement: In accordance with 2 CFR 200.318(a), non-Federal entities must use and maintain documented procurement procedures consistent with applicable Federal standards. 2 CFR 200.318(i) requires recipients to maintain records sufficient to detail the history of each procurement, including the rationale for the method of procurement, contractor selection, and the basis for the contract price. In addition, 2 CFR 200.318(h) requires recipients to award contracts only to responsible contractors possessing the ability to successfully perform under the terms and conditions of the proposed procurement. As part of this responsibility, recipients should verify that contractors are not suspended or debarred from participating in Federal programs prior to awarding a contract. Condition / Context: The Organization did not have a documented procurement policy that addressed the procurement requirements of the Uniform Guidance. During audit testing, one procurement for ecological restoration services was selected for review. We noted that the Organization solicited proposals from multiple qualified vendors and utilized an evaluation methodology to determine the contract award. However, documentation supporting the procurement process was not retained by the Organization. Supporting documentation was obtained through email records maintained by a former employee rather than from the Organization's procurement files. Additionally, the Organization did not maintain documentation demonstrating that the selected contractor had been verified as not suspended or debarred prior to contract award. Cause: The Organization had not established documented procurement procedures or implemented controls to ensure procurement transactions were adequately documented and retained. In addition, procedures were not in place to document verification that contractors were eligible to receive Federal awards. Effect: The lack of documented procurement procedures and supporting procurement records increases the risk that procurement activities may not comply with Uniform Guidance requirements and limits the Organization's ability to demonstrate that contracts were awarded through a fair, competitive, and compliant procurement process. Additionally, failure to document suspension and debarment verification increases the risk of contracting with an ineligible vendor. Questioned Costs: None. Recommendation: We recommend the Organization develop and implement a written procurement policy that complies with the Uniform Guidance procurement standards. The policy should require documentation of each procurement transaction, including the procurement method used, solicitation process, evaluation and selection criteria, contract award decision, basis for contract pricing, and retention of all supporting documentation. In addition, management should implement procedures to verify and document that contractors are not suspended or debarred prior to contract award and retain this documentation within the procurement file. Management’s Response: Management concurs with the finding and will implement effective internal controls over Procurement.
2025-006 Finding – Federal Award Type: Material Weakness in Internal Control over Compliance – Financial Reporting Criteria / Requirement: In accordance with 2 CFR 200.303, non-Federal entities receiving Federal awards must establish and maintain effective internal control over Federal awards that provides reasonable assurance the awards are managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR 200.302 requires recipients to maintain financial management systems that provide accurate, current, and complete disclosure of the financial results of each Federal award, support the preparation of required financial reports, and maintain records sufficient to demonstrate compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition / Context: The Organization submitted the required Federal Financial Report (FFR) by the applicable deadline. However, the report was prepared and submitted by a single employee without documented supervisory review or approval. In addition, the FFR was prepared using an external workbook rather than being directly supported by the Organization's accounting system or general ledger. As a result, the financial management system was not sufficiently utilized to support the preparation of the required Federal financial report. Cause: The Organization had not implemented procedures requiring documented supervisory review and approval of Federal Financial Reports prior to submission. Additionally, Federal Financial Reports were prepared using information maintained outside of the accounting system rather than being generated or supported directly by the general ledger. Effect: The lack of documented review and reliance on records maintained outside of the accounting system increases the risk that Federal Financial Reports may contain incomplete, inaccurate, or unsupported financial information. Consequently, the Organization may be unable to demonstrate that financial reports submitted to the Federal awarding agency are complete, accurate, and supported by its accounting records. Questioned Costs: None.We recommend the Organization implement formal internal controls over the Federal financial reporting process, including documented supervisory review and approval of all Federal Financial Reports prior to submission. Federal Financial Reports should be prepared using information maintained within the accounting system and reconciled to the general ledger before submission to ensure the reports are complete, accurate, and fully supported. Additionally, management should develop and implement a written Federal financial reporting policy that establishes procedures for preparing, reviewing, approving, reconciling, documenting, and retaining Federal Financial Reports in accordance with the Uniform Guidance. Management’s Response: Management concurs with the finding and will implement effective internal controls over Financial Reporting.