Finding Text
FINDING 2024-001 - RISK ASSESSMENT PROCESS RELATED TO COMPLIANCE
REQUIREMENTS
Material Weakness
Federal Programs: Education Stabilization Fund – Assistance Listing Number 84.425
Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number
was 2023-001.
Criteria
2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the
Organization 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 Unites States of the “Internal control Integrated Framework:, issued
by the Committee of Sponsoring Organization of the Treadway Commission (COSO)”.
Condition
The Organization has not established a formal process related to federal awards to identify all key compliance
requirements and changes in compliance requirements, evaluate risks of noncompliance with these
requirements, and respond to such risks of noncompliance through establishing or changing processes and
internal controls. The Organization also implements the use of federal funds through different departments.
Certain individuals, within a department, responsible for the use of federal funds or maintenance and safeguard
of assets acquired with federal funds lacked knowledge of the compliance requirements pertaining to the use
of the funds or the maintenance and safeguard of the acquired assets.
Cause and Effect
The material weakness resulted in the noncompliance findings described in items 2024-002 and 2024-003.
Recommendation
We recommend additional resources be allocated to federal award compliance to review federal award
provisions and requirements, evaluate risks of noncompliance, and respond to such risks through internal
controls. The process should include methods to identify and communicate changes to federal award
requirements to all key individuals within the Organization and to verify internal controls are implemented
correctly and are operating effectively.
Views of Responsible Officials and Planned Corrective Actions
The Organization’s Corrective Action Plan is included on pages 42 through 44.