Finding Text
Failure to Maintain Complete Accounting Records for Federal Awards Critera: Title 2 U. S. Code of Federal Regulations (CFR) Section 200.303, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards (Uniform Guidance) requires that the Village establish and maintain
internal control over federal awards that provide reasonable assurance that the
Village is managing the federal awards in compliance with federal statutes,
regulations, and the terms and conditions of the federal award. One of the
objectives of internal control over compliance is to ensure that federal transactions
are properly recorded and accounted for in order to permit the preparation of
reliable financial statements, including the Schedule of Expenditures of Federal
Awards. Condition: The federal award transactions were not recorded in the Village’s accounting records. Cause: The accounting software that the Village uses to maintain its other accounting records was not compatible with establishing and maintaining the accountingcords for the federal awards transactions. Effect: Federal award transactions could possibly be excluded from the financial statements and the Schedule of Expenditures of Federal Awards. Recommendation: All future federal award transactions should be recorded as transactions of the Water System Enterprise Fund in the accounting software.