Finding 1159811 (2021-001)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2021
Accepted
2025-10-02
Audit: 370353
Organization: Curry Water Authority (AL)

AI Summary

  • Core Issue: The Authority did not obtain a required audit under the Single Audit Act within the nine-month deadline after the fiscal year ended.
  • Impacted Requirements: Compliance with federal audit standards and Generally Accepted Accounting Principles (GAAP) was not met.
  • Recommended Follow-Up: Ensure timely audits in the future and review contracts with accounting firms to avoid similar issues.

Finding Text

Section 4.5 of the Water Revenue Bond Series 2020-DWSRF-DL states: “The Loan Recipient shall comply with the provisions of the federal Single Audit Act and Office of Management and Budget's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly called "Uniform Guidance"). Audit Requirements must be conducted according to Generally Accepted Accounting Principles as defined by the Governmental Accounting Standards Board and revisions, updates or successors.” The Authority failed to obtain an audit in accordance with the Single Audit Act within nine months after the end of the entity’s fiscal year, as required. The Authority contracted with an independent certified public accountant who conducted and issued the audit under generally accepted auditing standards. It was not until some time later when the Authority changed accounting firms that the issue was discovered and the audit was reperformed.

Corrective Action Plan

The organization contracted with an independent CPA and engaged that firm to conduct the omitted Single Audits, as soon as the oversight was brought to the organization's attention (by the new firm). The Single Audits were conducted for both 2021 and 2022 and were being submitted at the same time. The organization has also reviewed Federal guidelines, bond covenants and other details. The organization has created new internal control policies and has documented these. Further, they have discussed the requirements and importance with management and governance. They have designed policies to monitor and review this area to ensure future compliance.

Categories

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking Special Tests & Provisions

Programs in Audit

ALN Program Name Expenditures
66.468 Drinking Water State Revolving Fund $19.14M