Finding Text
Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control
over the federal award that provides assurance that the entity is managing the federal award in compliance with
federal statutes, regulations, and conditions of the federal award. 2 CFR 200.328 and 2 CFR 200.329 require the
auditee to collect financial information and monitor its activities under federal awards to assure compliance
with applicable federal requirements and performance expectations are being achieved and report these items
in accordance with the program requirements.
Condition: Of three reports tested, two instances in which support was not retained to substantiate federal
share of expenditures reported in a quarterly report and the final report. Management subsequently worked to
reconcile reports out of the Organization’s accounting software to support federal expenditures reported within
the reports that materially agree. Additionally, individual who prepared the report is the same individual
approving the report prior to submission to the federal agency.
Cause: Support was not retained to substantiate amounts reported within a semi-annual report and final report.
Additionally, management hasn’t implemented controls ensuring the individual preparing the report is separate
from the individual who reviews and approves the report prior to submission to the federal agency.
Effect: Without retaining documentation to support the amounts reported, demonstrating that the program
complies with laws, regulations, and other compliance requirements is difficult. Additionally, not having a formal
oversight process over reporting results in a reasonable possibility that reports that are inaccurate or incomplete
could be submitted.
Questioned Costs: None reported.
Context/Sampling: Two out of four semi-annual financial reports were reviewed along with one annual financial
report. There was a total of five financial reports filed.
Repeat Finding from Prior Year: No.