Finding Text
Finding Reference Number: 2024-009.
Federal Program: AL 21.027 –COVID-19 - Coronavirus State and Local Recovery Funds.
Passed through Entity: County of St. Joseph, Indiana.
Compliance Requirements: Reporting.
Type of Finding : Significant Deficiency in Internal Controls over Compliance.
Criteria: Recipients of federal awards are required to report periodically on financial information, as specified by the 2 CFR 200 Compliance Supplement or grant agreement. Reported information should be supported by the entity’s accounting records and subjected to an independent review and approval prior to submission in order to detect and correct any errors or omissions.
Condition and Context: The report selected for testing, representing the entire population, did not included documentation that was subject to an independent review and approval prior to submission to detect and correct potential errors or omissions and verify timely submission.
Questioned Costs: Not applicable.
Cause: The Organization lacks a robust internal control process to ensure all financial reports required by federal grants are independently reviewed and approved before submission. This may be due to inadequate staffing, insufficient training, or lack of established procedures.
Effect or Potential Effect: Without an independent review and approval process, there is an increased risk of errors or omissions in the financial reports, which could lead to non-compliance with federal reporting requirements. This could result in potential financial penalties, loss of funding, or damage to the Organization's reputation.
Recommendation: The Organization should implement a formal internal control process that includes independent review and approval of all financial reports before submission. This process should be documented and communicated to all relevant staff. Additionally, the Organization should provide training to ensure that staff understand the importance of this control and how to properly execute it. Regular monitoring and periodic verification should be conducted to ensure compliance with this process.
Views of responsible officials: Management acknowledges the finding and understands the need to complete and submit timely any required reporting to federal grantors as outlined by the notice of award, federal regulations, and/or grant agreement.