Finding Text
Material Weakness Internal Control: Financial Statement and Federal Awards Finding
Finding # 2023-001 – Late Filing of Financial Reports and Audit
Condition:
The fiscal year ended June 30, 2023 audit report, including reporting required under Uniform Guidance and bond compliance, was not filed with the appropriate agencies by the Montana statutory, Uniform Guidance and bond compliance filing due dates of within nine months after the fiscal year end of June 30, 2023 (March 31, 2024).
Criteria:
Audit reports for entities that have expended over $750,000 in federal awards and are subject to Uniform Guidance are required by MT statute (MCA 20-7-501) and federal law (2 CFR 200.512 (a)), and those subject to additional filing requirements due to bond compliance requirements are to be filed with the respective agencies within nine months of the entity’s fiscal year end. Internal control procedures should be designed and operational to meet these filing deadlines.
Context:
The School District had historically timely filed its audits to the respective agencies as required by law but has failed to do so for fiscal years ended June 30, 2022 and 2023.
Effect:
The School District filed the audit report and data collection form to the state, federal and credit agencies after the required due date of March 31, 2024 and is not in compliance with state, federal and bond compliance filing requirements.
Cause:
The School District had multiple changes in key financial management positions in a short period of time. Additional time was required by the entity to produce complete and auditable financial information and schedules, including the Schedule of Federal Awards, for the year ended June 30, 2023.
Questioned Federal Costs:
None
Recommendation:
Internal control procedures should be designed and put into place to ensure that financial reporting be completed in a timely manner. These procedures should include training on filing requirements and an understanding of the consequences of late submission. If necessary, assistance should be obtained from third party sources.
Views of Responsible Officials and Planned Corrective Action:
See Management’s Responses on page 106.
Repeat Finding:
Yes