Finding Text
Criteria: Proper internal controls and compliance with federal regulations require the maintenance of accurate and complete records to support federal award transactions. Additionally, effective succession planning is necessary to ensure continuity of operations and knowledge transfer. Condition: During our audit, we noted that the Organization had to recreate records and supporting documentation for federal transactions due to the departure of key staff members responsible for managing federal awards. Cause: The Organization lacked adequate procedures for record retention and succession planning for staff managing federal awards. When key personnel left, critical information and documentation were not readily available or properly transferred to new staff. Effect: this deficiency resulted in: 1. Significant time and resources spent recreating necessary documentation; 2. Increased risk of non-compliance with federal award requirements; 3. Potential for errors or misstatements in financial reporting related to federal awards; 4. Delays in the audit process. Recommendation: We recommend that the Organization: 1. Implement a comprehensive record retention policy specific to federal award management; 2. Develop and maintain detailed procedure manuals for federal award processes; 3. Establish a formal succession planning process for key positions, including cross-training of staff; 4. Consider implementing a document management system to centralize and secure critical records. Auditee Response: Management concurs with the finding and is committed to improving its record retention practices and succession planning for federal award management and has taken steps under its new leadership team to address these issues.