Finding Text
MATERIAL WEAKNESS IN INTERNAL CONTROL U.S. DEPARTMENT OF TREASURY 2024-001 - Coronavirus State and Local Fiscal Recovery Funds, AL No. 21.027; Coronavirus Capital Projects Fund, AL No.21.029 Condition: Materials were charged to project work orders when removed from inventory and not when installed. Reconciliations to contractor invoices, were not performed timely and differences were not identified in subsequent reconciliations tracking project activity for grant reporting. Criteria: Effective controls are required to ensure reported project materials and related expenses are installed, completed and adequately documented for approved project area. Controls should include timely reconciliation between work order charges and related contractor invoices supporting installation of materials used in order to support proper disbursement and reporting. Cause: Errors existed in the total materials charged to project work orders which were not identified timely by the SEMO Electric Cooperative and Subsidiary’s current monitoring and control activity procedures. Effect: Controls did not exist to adequately reconcile and report the material charges on project work orders used for grant reporting, in a timely manner. As a result, errors may exist in reported project expenses. Recommendation: Procedures should be implemented to ensure more timely reconciliation of material charges to work orders and reporting project grant expenses. Comprehensive documentation should be maintained to validate controls implemented for installation of materials. Procedures should include additional oversight and timely reconciliations of project expenses completed and reported. Identification as a Repeat Finding: This is a repeat of finding 2023-001. Grantee’s Response: Management concurs. There were large fiber installation projects still in process at year-end. Subsequent reconciliations have been completed. Controls and other project processes have been improved to ensure more timely reconciliation of material charge-outs to the timing of the installation of material.