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: Reporting and Matching Criteria or specific requirement: Grant reports filed by the Organization to granting agencies must be accurate and complete by reconciling to the Organizations financial reports and accounting records. Internal controls should be signed and implemented to prevent and detect errors in the data reported on the grant reports. 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 report prior to being certified and filed to ensure that there are no errors, irregularities, or misrepresentations. Condition: Of the two financial reports and two performance reports tested, there was no 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 reporting compliance requirement. When testing matching, the two financial reports that were tested did not report the correct amount for the indirect match incurred as part of the federal award. Questioned costs: None Context: No instance of noncompliance with the matching requirement, however during our testing of two financial reports, the Organization incorrectly reported the amount of the match incurred as part of the federal award. Of the two financial reports and two performance reports tested, there was no formal review documented by someone other than the preparer who submitted and certified the report. Cause: Due to limited personnel, the Organization had not implemented formal controls related to grant reports 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 documents their review of the financial and performance reports 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.