Finding Text
2 CFR 200.303 requires that organizations receiving federal awards must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award.
Formal controls were not established or documented surrounding the following compliance requirements specified for this grant under 2 CFR Part 200, Appendix XI:
Activities allowed or unallowed and allowable cost principles – lack of documented, timely review and approval of expenditures for three of eight transactions selected for testing; specifically relating to payroll expenditures.
Suspension and Debarment – no established internal control policies to verify that vendors selected for use were not suspended or debarred from use for expenditures of federal awards.
Subrecipient monitoring – no established internal control policies surrounding monitoring of subrecipients for compliance with principles established under 2 CFR Part 200, Appendix XI.
The Foundation and its affiliates have not established internal control policies to ensure compliance with principles established under the Uniform Guidance.
Lack of internal controls could result in instances of noncompliance with federal grant requirements, which could lead to loss of future funding or requests for repayment of federal awards previously distributed by federal agencies.
Not applicable.
This is not a repeat finding.
The Foundation and its affiliates should establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the 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).
Management's response is reported in "Corrective Action Plan" at the end of this report.