Criteria or specific requirement: 2 CFR 200.303(a) requires non federal entities receiving Federal awards to "Establish and maintain internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statut...
Criteria or specific requirement: 2 CFR 200.303(a) requires non federal entities receiving Federal awards to "Establish and maintain internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Per the United States Department of Agriculture SF-425 FAQs, SF-425 Reports are to be submitted within 90 days of the anniversary date of the award.
Condition: During testing it was noted that the financial report tested was filed after the required filing deadline. In addition, there was no evidence of review or approval over the report filing prior to submission to the granting agency.
Questioned costs: None
Context: A sample of 1 was made from a population of 1 financial report (entire population). The financial report did not have documentary evidence of review and approval. In addition, the report was filed after the submission deadline date.
Cause: Documentary evidence of supervisor review and approval of the SF-425s is not retained. Rather, such approval is only communicated verbally. In addition, the Organization does not currently have monitoring procedures in place to ensure reports are submitted timely.
Effect: Not filing reports on a timely basis can present risks, such as outdated and unreliable information or the inability to detect potential fraud or irregularities. In addition, delayed reports can impede regulatory authorities' ability to monitor compliance, detect patterns or trends, and assess risks in a timely manner. Without adequate documentary evidence around the review of financial reports, there is an increased risk of errors and fraud in the reporting process, which could result in inaccurate financial reporting and misappropriation of funds. Repeat Finding: No
Recommendation: CLA recommends for the Organization to place emphasis on stronger controls around the timely filing of required reports, such as retaining a monthly checklist of required reconciliations and reports. CLA also recommends implementing a procedure that documents the supervisor's review (another individual who did not prepare the report) and approval of the Federal Financial Reports (SF-425s), whether that be via an email chain or retaining a copy that also includes the supervisor's signature on the report.
Views of responsible officials: Management agrees with the finding.
Action Taken in Response to Finding: In response to these findings, OSA has reviewed its formal review and approval procedures to ensure that documentation of review and approval occurs with every federal expense and invoice, and all federal reports are submitted accurately and on-time. In response to this review, OSA has implemented the following:
● Adherence to a current and accurate Financial Management Policy Manual. The manual documents OSA’s policy and procedures regarding this finding:
○ Monthly close/reconciliation reviewed by Executive Director and Board of Directors.
○ Review of federal grant requirements by OSA Leadership Team to support the finance manager, to ensure all federal financial reports are filed accurately and on time.
○ Review and approval of all allowable federal expenditures and invoices by the OSA Executive Director.
○ Archiving a digital copy of review and approvals for every invoice submitted, including review and approval for all supporting documentation including approved timesheets.
Name(s) of the Contact Person Responsible for Corrective Action: Laurajean Lewis, Executive Director, at laurajean@seedalliance.org
Planned Completion Date for Corrective Action Plan: 06/01/2024