Finding Text
2024-006 – WATERSHED REHABILITATION PROGRAM – LACK OF CONTROLS AND IMPROPER PERIOD OF PERFORMANCE – WRD – ALN 10.916 – MATERIAL WEAKNESS & MATERIAL NONCOMPLIANCE FINDING TYPE: MATERIAL WEAKNESS & MATERIAL NONCOMPLIANCE Finding 2024-006 Federal Program: FAIN: WATERSHED REHABILITATION PROGRAM NR19633XXXXC005 ALN: 10.916 Year(s): 2024 Federal Agency: U.S. Department of Agriculture Questioned Cost: $170,468.85 Condition Pembina County Water Resource District applied costs to the Watershed Rehabilitation Program after the period of performance, which shows a lack of internal controls. The total value of the expenses past the period of performance end date was approximately $170,468 which occurred through September 14, 2024, more than a month past the period of performance end date. Effect Pembina County Water Resource District was not in compliance with the period of performance requirement and there is an increased risk that the WRD charged unallowable expenditures to the Watershed Rehabilitation Program. Cause Pembina County Water Resource District may not have had a clear understanding of the period of performance requirements of the Watershed Rehabilitation Program. There is only one person that is aware of the period of performance and no review is done to ensure expenditures were incurred during the period of performance. In addition, they may not have been aware of the requirement to document and develop internal controls related to the federal program. Criteria Per the grant award, A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Standards for Internal Control in the Federal Government (Green Book) requires management to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. Management is to design appropriate types of control activities for the entity's internal control system. Control activities help management fulfill responsibilities and address identified risk responses in the internal control system. Context As stated in the Grant Award Amendment, the period of performance date runs from August 21, 2019 through August 8, 2024. During testing 2 of the 6 reimbursements tested had expenses that ran beyond the ending period of performance date. We tested 100% of the reimbursements. Repeat Finding No. Recommendation We recommend Pembina County Water Resource District establish and maintain internal controls and ensure compliance with the period of performance requirement as stated in grant award by establishing a review process to ensure expenses are within the period of performance for the Water Rehabilitation Program. Pembina County Water Resource District’s Response See Corrective Action Plan.