Finding 1056793 (2023-006)

Material Weakness
Requirement
ABCGHI
Questioned Costs
-
Year
2023
Accepted
2024-08-05
Audit: 316607
Organization: Morgan County Water District (KY)

AI Summary

  • Core Issue: The district reported only $160,000 in federal funds spent, while the actual amount was $1,771,693.
  • Impacted Requirements: Lack of compliance with 2 CFR 200.510(b) regarding the schedule of expenditures of Federal awards.
  • Recommended Follow-Up: Implement internal controls and written procedures for federal fund expenditures, and prepare a complete SEFA for any year federal funds are used.

Finding Text

Condition: This finding is repeated from the financial statement section. Before beginning the audit, inquiry was made of management about the amount of federal funds expended in the audit year ending December 31, 2023. Management indicated $160,000 in grant funds had been expended by forwarding an eamil from GWADD. In the course of our audit, we determined the district spent $1,764,760 in Federal loan funds, along with $6,933 in Rural Develoment grant proceeds. Managment was unable to provide evidence of proper internal controls over expenditures of Federal funds, i.e. written procedures. Criteria: 2 CFR 200.510 (b) states in part, "Schedule of expenditures of Federal awards. The auditee must also prepare a schedul of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as detrmined in accordance with 2 CFR 200.502." Effect: Failure to disclose the correct amount of federal funds expended. Cause: Failure to implement proper internal controls. Recommendation: We recommend the District implement proper internal controls over expenditures of Federal funds, including written procedures. We also recommend the District compete a schedule of expenditures of Federal awards (SEFA) in any year federal funds are expended.

Categories

Reporting Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 480351 2023-006
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
66.468 Capitalization Grants for Drinking Water State Revolving Funds $1.76M
21.027 Coronavirus State and Local Fiscal Recovery Funds $160,000
23.001 Appalachian Regional Development (see Individual Appalachian Programs) $6,933