Finding Text
Finding 2024-01: Considered a significant deficiency. Criteria: Uniform Guidance (2 CFR §§200.302–303 and 200.318–320) requires non-federal entities to establish and maintain effective internal controls and written policies and procedures to ensure compliance with federal award requirements. These policies must be sufficiently detailed to provide consistent and proper administration of federal programs Condition: As part of our audit of compliance with the requirements of the Uniform Guidance for the year ended December 31, 2024, we noted that West Michigan Food Processing Association does not have formal, written policies and procedures in place related to the administration of its federal awards. Specifically, we noted the absence of written procedures addressing: ➢ Financial management systems (including allowable costs and cash management) ➢ Procurement standards ➢ Subrecipient monitoring ➢ Internal controls over compliance ➢ Conflicts of interest Effect: Without formal written policies and procedures, there is an increased risk that federal program requirements may not be followed consistently. This could result in noncompliance with federal regulations, mismanagement of federal funds, or potential questioned costs. Additionally, the absence of documentation limits the ability to demonstrate compliance during audit or grantor review processes. Cause: The absence of written policies appears to result from the entity historically depending on established practices and staff knowledge, rather than formally documenting procedures as required under Uniform Guidance. Recommendation: We recommend that West Michigan Food Processing Association develop and implement comprehensive written policies and procedures to address the requirements of the Uniform Guidance. These should be tailored to the Association’s structure and operations and cover all applicable federal compliance areas. Management should also establish a process to periodically review and update these documents to ensure continued compliance. Response: West Michigan Food Processing Association concurs with the facts of the finding and is implementing procedures to prevent this in the future.