Finding Text
Finding Reference 2024-04
Assistance Listing Number 21.027 Coronavirus State and Local Fiscal Recovery Funds
Name of Federal Agency Department of Treasury
Compliance Requirement Reporting
Type of Finding: Significant Deficiency on Internal Control and Noncompliance
Condition:
From a sample of eight expenditure reports examined, the auditors noted that five reports were submitted after the due
dates established by the pass-through entity.
A similar finding was reported during the prior year’s single audit as finding number 2023-03.
Criteria:
In compliance with the reporting requirements set by the pass-through entity, the Authority must submit expenditure
reports on the first and third Friday of each month to disclose expenditure under ALN 21.027.
The Uniform Guidance section 200.303 regarding internal controls requires subrecipients to establish, document, and
maintain effective internal control over Federal awards that provide reasonable assurance that the management of
Federal awards is in compliance with Federal statutes, regulations, and terms and conditions of the Federal awards.
This includes accurate financial reporting and proper segregation of duties to prevent any individual from both
preparing and reviewing the same transaction or report.
Cause:
The Authority lacks sufficient personnel assigned to oversee, review and make sure the reports are timely issued to
the passthrough entity. This process is conducted by an employee without any formal oversight or review, prior to the
submission to the passthrough entity.
Effect:
The lack of management review, oversight, and late submission of the expenditure reports increases the risk of noncompliance
with federal requirements and inaccuracies in reporting over federal funds.
Questioned Costs:
None
Recommendation:
To resolve these issues, the Authority should consider the following actions:
Strengthen Internal Controls: Implement stronger internal control procedures to ensure accurate financial
reporting and supervision. This should include establishing clear protocols for the timely preparation and
review of financial reports, with distinct roles assigned to different individuals to maintain segregation of
duties.
Staffing Issues: Take steps to address the employee shortage, either by hiring additional staff or by training
existing staff to take on multiple roles, ensuring that duties can be adequately segregated even with limited
personnel.
Regular Training and Awareness: Conduct regular training sessions for all relevant staff on compliance with
Federal program requirements and the importance of internal controls, including the need for segregation of
duties in financial reporting.
Views of Responsible Officials
Refer to Management’s unaudited corrective action plan.