Finding Text
Finding 2023-001 – Reporting (Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance) - (See chart on section III of audit findings page) Criteria – In accordance with the Uniform Guidance (2 CFR Part 200) and applicable federal regulations, recipients of federal awards are mandated to submit required financial reports within specified deadlines. Furthermore, recipients are required to maintain adequate documentation that serves as verifiable proof of submission for all required reports, as outlined in the compliance supplement. In accordance with Uniform Guidance, the Agency is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition/Context – For the reports selected for testing, the Agency did not consistently retain verifiable documentation evidencing the timely submission of required financial reports. Additionally, the Agency did not have an effective review process for federal award reporting for the related program and the overall expenditures presented on the preliminary Schedule of Federal Expenditures (SEFA) which led to some inconsistencies between what was reported by the Agency and what was ultimately paid. Lastly, the single audit was conducted after the data collection form deadline. Effect – With respect to federal award reporting it appears that not all reports were filed timely, certain program reporting was incorrect, the related portions of the preliminary SEFA were not correct, and the data collection form is late. In all instances tested in which the program reporting and related reimbursement request were not correct, the amount paid to the Agency was correct based on the allowable costs and the terms of the award. As such there were no questioned costs. In addition, once the correct program reporting amounts were identified the final SEFA was corrected. Cause – The primary cause of this finding is attributed to turnover, which resulted in a breakdown of established processes, oversight and communication protocols related to the timely submission, preparation and review of required grant compliance reports. Repeat Finding – This is a repeat and modified finding of 2022-002. Recommendation – We recommend that the Agency establish and implement a comprehensive documentation, tracking, and review system for all required grant compliance reports. This system should include a checklist of reporting requirements, corresponding deadlines, appropriate review, and a mechanism for retaining verifiable proof of submission. Views of Responsible Officials – The responsible officials acknowledge the finding, concur with the recommendation and noted that while related corrective action has been taken, given the timing of the audits, the effective date of that action was subsequent to the period under audit.