Finding Text
Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements.
Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)."
Cause: CICOA's management did not maintain a system of internal controls to ensure compliance with the compliance requirements listed above.
Effect: The failure to establish an effective internal control system placed CICOA at risk of noncompliance with the grant agreement and the compliance requirements. A lack of effective reviews could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by the review process not ensuring there was accurate reporting of the activities of the programs. Context: There was no formal review/approval of the FSSA Contract Claim Reimbursement form outside of who prepared the form.
Recommendation: We recommend that CICOA establish controls to ensure that segregation of duties are in place and that someone separate of who prepares the reimbursement claim is the one submitting the claim. The reimbursement claim should be compared to supporting documentation to ensure accuracy of the claim reimbursement form.
Views of Responsible Officials and Planned Corrective Actions: Management recognizes its compliance requirements for maintaining and implementing sound controls over financial reporting and the potential non-compliance impacts of a lack of such control environment. Leadership is currently considering options for adequate oversight and review. Until such time that adequate staffing for review is in place, a member of management or their designee will review claims.