Finding Text
Federal Agency: U.S. Department of Agriculture Federal Program Name: Partnerships for Climate-Smart Commodities Assistance Listing Number: 10.937 Federal Award Identification Number and Year: NR233A750004G064 - 2023 Award Period: 7/20/2023-6/30/2028 Type of Finding: Significant Deficiency in Internal Control over Compliance Compliance Requirement: Cash Management and Matching Criteria or specific requirement: Grant claims filed by the Organization to granting agencies must be accurate, reconcile to the Organizations general ledger system and for cost-reimbursable grants, represent costs incurred. Internal controls should be signed and implemented to prevent and detect errors in the data reported on the grant claims. Segregation of duties is an internal control intended to prevent or decrease to occurrence of errors or intentional fraud. Segregation of duties ensure that no single employee has control over all phases of a transaction. There should be a secondary review of each grant claim prior to being certified and filed to ensure that there are no errors, irregularities, or misrepresentations. Condition: Of the 5 claims for reimbursement selected for testing, noted 4 did not have a formal review documented by someone other than the preparer. Accordingly, this does not allow for a proper segregation of duties for internal control purposes over the cash management compliance requirement. When testing matching, the two claims that were tested included an indirect match that was not reported correctly, although the matching requirement was met. Questioned costs: None Context: While performing audit procedures, it was noted that four of five grant claims tested that were submitted for reimbursement did not have formal documentation of review by someone other than the preparer. Cause: Due to limited personnel, the Organization had not implemented formal controls related to reimbursement requests. Effect: There could be the possibility that the client would over- or under-report certain items for reimbursement on claims if there are no reviews in place. Repeat Finding: No Recommendation: We recommend the Organization implement a formal control where someone other than the preparer document their review of the claim prior to submitting to the federal agency. This review would include comparing the amounts in the report to the general ledger or other supporting documents. This review should be supported by documenting the signature and date prior to submission. Views of responsible officials: There is no disagreement with the audit finding.