Finding 2023-004 Inadequate Internal Control over Federal Grant Reporting and Record Retention Federal award: Assistance Listing No. 21.027, Coronavirus State and Local Fiscal Recovery Funds Auditor Description of Condition and Effect During the audit, we noted that the Organization had not establis...
Finding 2023-004 Inadequate Internal Control over Federal Grant Reporting and Record Retention Federal award: Assistance Listing No. 21.027, Coronavirus State and Local Fiscal Recovery Funds Auditor Description of Condition and Effect During the audit, we noted that the Organization had not established and implemented sufficient controls over the preparation, review, submission, and retention of required federal grant reports. Specifically, the Organization could not provide sufficient documentation demonstrating that: • Financial and programmatic information in required reports was reconciled to the underlying accounting and project records; • All applicable reporting elements, including capital expenditures and contractor or subaward information, were evaluated for completeness; • Reports were reviewed and approved by appropriate personnel before certification and submission; • Reports were submitted by the applicable deadlines and evidence of submission was retained; and • Corrections or resubmissions were appropriately documented and supported. The absence of appropriately designed and implemented controls creates a reasonable possibility that materially inaccurate, incomplete, or untimely reports could be submitted, or that material noncompliance with federal reporting and record-retention requirements could occur and not be prevented, or detected and corrected, on a timely basis. Insufficient records may also prevent the Organization from substantiating reported information or demonstrating compliance during an audit, monitoring review, or other oversight. Auditor Recommendation Management should adopt written federal grant reporting procedures and implement a standardized process for preparing, reconciling, reviewing, approving, submitting, and retaining required reports. The process should address all applicable financial and programmatic reporting elements, including capital expenditures and contractor or subaward information, and should require retention of the reports, submission confirmations, supporting records, and documentation of any corrections or resubmissions for the period required by the award. Proposed Corrective Action The Organization agrees with the finding. Management will adopt written federal grant reporting and record-retention procedures, maintain a reporting calendar, and assign responsibility for preparation and review. Reported financial and programmatic information will be reconciled to the underlying accounting and project records, and a standardized checklist will be used to evaluate all applicable reporting elements. Management will document review and approval, retain evidence of timely submission, and maintain the reports, supporting records, and documentation of corrections or resubmissions in a centralized grant file for the retention period required by the award. Responsible Person: Anticipated Completion Date: June 30, 2027