Audit 52757

2022-003 Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance - Other Criteria Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (the Schedule) and accompanying notes to the Schedule. Condition The Organization does not have an internal control system designed to provide for a complete and accurate Schedule being audited. We were requested to assist in drafting the Schedule. Cause Auditor assistance with preparation of the Schedule is not unusual, as the Schedule as unique and specialized requirements and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect There is a reasonable possibility that the Organization would not be able to draft the Schedule that is correct without assistance of the auditors. Questioned Costs None reported. Context Sampling was not used. Repeat Finding from Prior Years No Recommendation While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization?s Schedule and internal controls that impact financial reporting. View of Responsible Officials Management agrees with the finding.

2022-004 Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions 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 conditions of the federal award. Condition During our testing, we noted that the reserve account was not separately identified and there was no formal review separate from the preparer over the reserve fund reconciliation for the federal program. Cause The Organization did not have an adequate internal control policy in place to ensure the reserve account was separately tracked and a documented review and approval over the reserve fund occurred. Effect The lack of adequate policies governing the review increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs None reported. Context Sampling was not used. The Organization has one reserve account that was tested. Repeat Finding from Prior Years No Recommendation We recommend that the Organization enhance internal control policies to ensure that the reserve fund is separately tracked and formal documentation of reviews are present. View of Responsible Officials Management agrees with the finding.

2022-003 Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance - Other Criteria Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (the Schedule) and accompanying notes to the Schedule. Condition The Organization does not have an internal control system designed to provide for a complete and accurate Schedule being audited. We were requested to assist in drafting the Schedule. Cause Auditor assistance with preparation of the Schedule is not unusual, as the Schedule as unique and specialized requirements and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect There is a reasonable possibility that the Organization would not be able to draft the Schedule that is correct without assistance of the auditors. Questioned Costs None reported. Context Sampling was not used. Repeat Finding from Prior Years No Recommendation While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization?s Schedule and internal controls that impact financial reporting. View of Responsible Officials Management agrees with the finding.

2022-004 Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions 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 conditions of the federal award. Condition During our testing, we noted that the reserve account was not separately identified and there was no formal review separate from the preparer over the reserve fund reconciliation for the federal program. Cause The Organization did not have an adequate internal control policy in place to ensure the reserve account was separately tracked and a documented review and approval over the reserve fund occurred. Effect The lack of adequate policies governing the review increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs None reported. Context Sampling was not used. The Organization has one reserve account that was tested. Repeat Finding from Prior Years No Recommendation We recommend that the Organization enhance internal control policies to ensure that the reserve fund is separately tracked and formal documentation of reviews are present. View of Responsible Officials Management agrees with the finding.