Finding Text
Criteria or Specific Requirement
Grantees must provide reasonable assurance that required reports for federal awards include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. Management of the Organization is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis.
Condition
Samples of required quarterly financial and performance reports were obtained in order to determine internal control over compliance and compliance with federal reporting requirements. As a result of testing, there was no documented evidence that someone other than the preparer was involved in the reporting process.
Cause
The Organization did not have internal controls in place to ensure approval of reports prior to submission to the federal agency.
Effect or Potential Effect
Due to the items noted above, there is a risk that amounts reported on quarterly financial and performance reports are incorrect. No questioned costs are reported as this requirement relates to procedural requirements, where questioned costs are not quantifiable.
Recommendation
The Organization should address the weaknesses in internal controls noted above by requiring two individuals to be involved in the reporting process, and that the review and oversight be formally documented.
Views of Responsible Officials
Management’s corrective action plan is included at the end of this report