Finding Text
Criteria: 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Association must, among other things, “establish and maintain effective internal control 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)”.
Condition and Context: We noted that a formal tracking and review process did not exist for earmarking of administrative costs relating to ESES-CV-020-0038 and ESRR-CV-020-0014. However, no noncompliance with the earmarking for either award was noted during testing. The Association did not spend funds under the other awards under this assistance listing number which would require tracking, review and approval procedures to be implemented during 2023.
Cause and Effect: The lack of adequate documentation to support earmarking for the federal award could have resulted in material noncompliance to the referenced compliance requirement and to the program as a whole.
Recommendation: We recommend the Association implement formal tracking, review and approval procedures over earmarking levels for federal awards ESES-CV-020-0038 and ESRR-CV-020-0014.
Views of Responsible Officials and Planned Corrective Actions: The Association agrees with the finding and plans to implement their corrective action during October 2024.