Finding 1161680 (2024-003)

Finding 2024-003: Activiites Allowed or Unallowed & Allowable Costs/Cost Principles & Period of Performance. Clean Energy Demonstrations - ALN 81.255. Cirteria: Pursuant to 2 CFR part 200 section 303, MACH2 is responsible for establishing and maintaining effective internal control over the Federal award that provides reasonable assurance that MACH2 is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal Award. Condition: All of the three invoices selected for testing did not have sufficient audit evidence to demonstrate that they were approved prior to being charged to the award. There were no noted instanced of noncompliance with activities allowed or unallowed, allowable costs/cost principles, and period of performance. Cause: MACH2 was in the process of developing internal control policies when they experienced a turnover of key personnel. Effect: Internal controls are not properly designed to provide reasonable assurance of compliance with the Federal Award. Questioned Costs: None. Recommendation: MACH2 should establish an internal control policy to ensure transactions are reviewed and approved prior to being charged to the grant and the approval should be documented for each transaction. Management's Response: MACH2 did not make any charges to its federal award in 2024. MACH2 created and implemented written policies prior to execution of cooperative agreement in January 2025 regarding the review and approval of grant expenditures. These policies were in place prior to any expenses being charged to the federal award. Please see the corrective action plan for more details on how MACH2 has addressed this finding.