Finding Text
Type of Finding: Significant Deficiency in Internal Control over Compliance - Reporting Criteria: Federal regulations award recipients to submit semi-annual and annual reports in accordance with timelines defined in the award. Amounts reported are required to be complete, accurate and prepared in accordance with the entity’s basis of accounting and be supported by financial statements and schedule of expenditures of federal awards. Condition: The Association’s controls were not effective to ensure that reports were submitted timely and that amounts reported were supported by adequate documentation. • The December 31, 2024 final SF-425 for Contract #10CH01204404 was due April 30, 2024. Although the report was submitted prior to the due date, it was not accepted by the granting agency. The Association did not receive any extension from the granting agency and a final report was not available as of the date of the audit. • During the federal agency monitoring review conducted subsequent to the audit period, the Association was found to have omitted required administrative cost information on the SF-425. This omission resulted in an incomplete financial report submission. Context: Our procedures included testing four SF-429 (Real Property Status Reports) and two SF-425 (Federal Financial Report) reports that were required as part of the grant contract provisions and federal reporting requirements. Cause: The Association experienced challenges in implementing a new financial reporting system in 2021 that continued throughout the 2024 fiscal year. As a result, there was no reconciliation or support for amounts reported. Effect: Incorrect financial and non-financial data submitted via these reports may result in potential errors in analysis or other determinations by the federal grantor. This finding did not result in questioned costs since the reports were not used to request reimbursement. Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2023- 004. Recommendation: We recommend that the Association establishes controls that require timely reporting and support amounts reported. View of responsible officials: There is no disagreement with this audit finding.