Finding 1140379 (2024-001)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2024
Accepted
2025-06-05

AI Summary

  • Core Issue: Lack of review and approval for compliance with grant terms before submitting expenses.
  • Impacted Requirements: Grantees must ensure expenses comply with federal program requirements to avoid noncompliance.
  • Recommended Follow-Up: Implement formal processes to review and document expense approvals for compliance with grant terms.

Finding Text

Internal Control Over Compliance: Auditing Finding 2024-001 - Review of Expense Details for Compliance Identification of the federal program: Assistance Listing Number 10.727 Inflation Reduction Act – Urban & Community Forestry Program. Condition: From the selections made for internal controls testing, the auditor noted no review/approval for compliance with the terms of the grant agreement was conducted prior to submission of the costs to the grantor. Criteria: Under the requirements of the major federal program the grantee must comply with the compliance requirements applicable to the major program for each expense. The grantee is responsible for maintaining a system of internal control for tracking compliance of expenses with the applicable terms of the grant and the requirements applicable to the major federal program. Cause: An informal review of general ledger coding was performed, however, this review was not taken in the context of compliance with the compliance requirements applicable to the major federal program. Effect or potential effect: Incorrect calculations or improper expenses could lead to noncompliance, which could potentially impact future funding from government agencies. Questioned costs: None Context: From a sample of 25 expense transactions, auditor noted 23 where the review was not performed. Recommendation: We recommend management implement processes and controls to perform a review of expenses being submitted for reimbursement to document approval of costs in compliance with the terms of the grant. View of responsible officials and planned corrective actions: Management agrees with the finding. See attached letter.

Categories

Cash Management Internal Control / Segregation of Duties

Other Findings in this Audit

  • 563936 2024-001
    Material Weakness
  • 563937 2024-001
    Material Weakness
  • 1140378 2024-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $291,438
10.727 Inflation Reduction Act Urban & Community Forestry Program $287,502
10.675 Urban and Community Forestry Program $57,678
10.664 Cooperative Forestry Assistance $47,091