Finding Text
Finding 2024-001 – Reporting (Compliance, Internal Controls Over Compliance) Material Weakness ALN 10.767 Intermediary Relending Program Criteria: Under Intermediary Relending Program (IRP) regulations (7 CFR §4274.338(b)(4)(ii)(A)), recipients must submit quarterly and semiannual financial reports to USDA Rural Development. Additionally, 7 CFR §4274.338(b)(4)(iii), requires submission of an annual proposed budget. Under Uniform Guidance, 2 CFR §200.303, entities are required to establish and maintain effective internal controls over federal awards to ensure compliance, including management review procedures to verify reports are accurate, complete, and timely. Condition: Testing of the reporting requirements disclosed that the quarterly and semiannual IRP reports were not submitted to USDA Rural Development. Questioned Costs: None Cause: BASEC was unaware of the IRP reporting requirements and has not established a formal review and approval process for preparing and submitting the required reports. Effect: The absence of timely submission of required reports results in noncompliance with federal program requirements. Recommendation: We recommend that BASEC establish and document a formal review and approval process for quarterly and semiannual IRP reports, in accordance with 2 CFR §200.303. The process should include supervisory review, documented approval (e.g., sign-offs or electronic authorization), retention of supporting documentation, and a tracking system to ensure timely submission. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.