Finding Text
Federal Agency: U.S. Department of Transportation Federal Program Title: Formula Grants for Rural Area and Tribal Transit Program AL Number: 20.509 Federal Award Identification Number and Year: MN-2023-045-00 Pass-Through Agency: Minnesota Department of Transportation Pass-Through Number(s): 1054531 Award Period: 1/1/2024-12/31/2024 Type of Finding: • Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: Under 2 CFR section 200.303, a non-federal entity must establish and maintain effective internal controls over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Timely review and approval should be maintained to ensure accurate amounts are being drawn down prior to submission. Condition: The Organization did not have adequate internal controls in place for the full fiscal year to ensure cash drawdowns are approved by the appropriate personnel before being submitted. Questioned Costs: N/A Context: Three of the three selections did not have a documented review process in place on the drawdown prior to submission to the state. This was not a statistically valid sample. Cause: Management did not have a separate individual assigned to review the cash drawdown for the request for funds. Effect: Potential for inaccurate amounts of funds to be requested. Repeat Finding: This is not a repeat finding. Recommendation: A separate individual with supervisory authority over the preparer should be assigned to review and approve the cash drawdown prior to submission. Views of responsible officials and planned corrective actions: There are no disagreements with the audit finding. The Organization will ensure there are proper segregation of duties regarding the cash drawdown process.