Finding Text
Finding 2024-001 Significant Deficiency
Internal Control over Major Federal Award Programs
Criteria: Accounting principles generally accepted in the United States of America ("GAAP"), as prescribed by the Governmental Accounting Standards Board, require entities to establish and maintain effective internal control over financial reporting to prepare timely, accurate financial reports.
Condition: During our audit, we identified that the Project did not deposit its surplus cash within the required deadline. This resulted in noncompliance with the established financial controls and reporting requirements. The delay in deposit could have impacted the Project's compliance with Major Federal Award Programs.
Cause: The Project's internal control procedures did not ensure that surplus cash deposits were made within the required timeframe. This indicates a deficiency in the financial closing process related to Major Federal Award Programs.
Effect: As a result of this condition, the Project was not in compliance with the required financial reporting timeline. The delay in deposit could lead to noncompliance with Major Federal Award Programs.
Recommendation: Management should implement stronger internal controls to ensure surplus cash deposits are made in accordance with the required deadlines. This may include setting up automated reminders, improving oversight, or assigning clear responsibilities to ensure compliance.
Views of Responsible Officials and Planned Corrective Actions: Management has reviewed the audit finding and acknowledges the delay in depositing surplus cash. Management was under the impression that the surplus cash was going to be used for the reduction of a future HAP payment. Management believes this was an isolated incident and has taken corrective action by reinforcing internal procedures to ensure timely deposits in the future. Additional monitoring measures have been implemented to prevent recurrence.