Finding Text
Criteria: Federal regulations award recipients to submit semi-annual and annual reports in accordance with timelines defined in the award. Amounts reported are required to be complete, accurate and prepared in accordance with the entity’s basis of accounting and be supported by financial statements and schedule of expenditures of federal awards.
Condition: The Associations controls were not effective to ensure that reports were submitted timely and that amounts reported were supported by adequate documentation.
• The December 31, 2022 annual SF-425 was due April 30, 2023. The report was submitted May 17, 2023.
• The December 31, 2022 annual SF-425 overstated total expenditures by $8,634 for award number 10CH01204402.
Questioned Costs: None.
Context: Our procedures included testing four SF-429 (Real Property Status Reports) and four SF-425 (Federal Financial Report) reports that were required as part of the grant contract provisions and federal reporting requirements.
Cause: The Association experienced challenges in implementing a new financial reporting system in 2021 that continued throughout the 2022 fiscal year. As a result, there was no reconciliation or support for amounts reported.
Effect: Incorrect financial and non-financial data submitted via these reports may result in potential errors in analysis or other determinations by the federal grantor. This finding did not result in questioned costs since the reports were not used to request reimbursement.
Recommendation: We recommend that the Association establishes controls that require timely reporting and support amounts reported.
View of Responsible Officials: There is no disagreement with this audit finding.