Finding Text
Finding 2022-006 Lack of Internal Control over Reporting
Federal Agencies: U.S. Department of the Treasury, U.S. Department of Housing and Urban Development, and U.S. Department of Health and Human Services
Federal Programs: Coronavirus State and Local Fiscal Recovery Fund (ARPA), NAHASDA, Low Income Home Energy Assistance (LIHEAP), respectively
Assistance Listing Numbers: 21.027, 14.867, and 93.568, respectively
Award Numbers: SLFRP1627 and SLFRP5070 (ARPA), 55-IT0211860 and 20BV0211860 (NAHASDA), 21RGAKEC6, 21RGAKLWC5, 21RGAKLIE4, 21RGAKLWC6, 22RGAKLIEA, 23RGAKLIEA, 23RGAKLIEE, and 23RGALLIEI (LIHEAP)
Award Years: 2021 (ARPA), 2022 (NAHASDA), 2021, 2022 and 2023 (LIHEAP)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Adequate internal control over reporting should be in place to ensure that quarterly financial reports are reviewed and approved by a member of management prior to submission. Such approval processes should be clearly documented and maintained. These reports should also be in agreement with the underlying accounting system.
Condition and Context: During our testing of reporting under the LIHEAP program, the Council was unable to provide sufficient documentation to determine whether the required annual performance report and quarterly financial reports were submitted during the year under audit. Therefore, we were unable to determine whether the reports, if any, were reviewed and approved by management, and submitted in a timely manner. During our testing of reporting under the ARPA program, it was determined that the annual financial report was not submitted timely. During our testing of reporting under the NAHASDA program, we determined that two quarterly financial reports out of the two tested were not submitted timely. Additionally, the Council was unable to provide sufficient documentation to determine whether the annual NAHASDA performance report was reviewed and approved by management and submitted timely.
Cause: Lack of internal control over reporting.
Effect: Lack of internal control over reporting could result in inaccurate and unauthorized reporting of program expenditures.
Questioned Costs: None noted.
Repeat Finding: This is not a repeat finding for the major federal programs noted above, however, this was a reported finding for major programs audited as major in 2021 as finding 2021-005. Therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management strictly adheres to adopted internal control procedures related to grant reporting.
Management’s Response: Management agrees with this finding. See Corrective Action Plan.