Finding 1155426 (2024-003)

2024-003 Finding – Federal Award Type: Cash Management (Invoices) – Material Weakness in Internal Control over Compliance. (Partial repeat of finding 2023-002) Identification of Federal Program: AL Number: 81.086 Conservation Research and Development Program Criteria / Requirement: 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition / Context: It was noted during the audit that there were insufficient internal controls over invoices submitted for cost reimbursement related to federal grants, as 2 of the 4 invoices were reviewed months after the draws were submitted and received. The two sampled items without timely review were in the beginning of the year under audit, showing that Forth Mobility Fund was correcting this internal control late in the year. While the internal controls were insufficient, our sample of invoices did not contain errors or undocumented amounts. Cause: Procedures were not in place to ensure that Forth Mobility Fund is maintaining adequate internal controls over compliance in regards to cash management requirements. Key duties and functions are not segregated among organization personnel and internal control policies and procedures are inadequate to properly define the roles and responsibilities of accounting personnel performing key functions. Effect: Failure to maintain sufficient internal controls over invoices submitted for cost reimbursement related to federal grants may result in the wrongful use of federal funds and/or non‐compliance with the provisions of applicable requirements. Questioned Costs: None. Recommendation: The Organization should establish written policies and procedures regarding invoicing for costreimbursement related to federal grants which include proper segregation of duties. Management’s Response: We agree with the auditor's comments, and effective October 31, 2024, we implemented proper segregation of duties for preparing and submitting cost-reimbursement invoices. These changes have been incorporated into our written policies and procedures.