Finding Text
Criteria: 2 CFR §200.327 and §200.328 requires recipients of federal awards to submit accurate and timely financial reports as required by the terms and conditions of the award. The Federal Financial Report (FFR) must be submitted by the due date specified in the grant agreement and must reflect accurate financial data. Condition and Context: During our audit of the Community Health Centers Cluster, we noted the entity failed to submit the required FFRs by the established deadlines for two annual reports. Additionally, two submitted reports contained inaccuracies, including expenditures that did not agree to amounts reported on the 2024 Schedule of Expenditures of Federal Awards and/or underlying supporting financial records. In one instance the report was filed 107 days late. In the second instance the report was filed 33 days late. Since this is a repeat finding, this is considered to not be an isolated instance and appears to be more indicative of a systemic problem. Effect: Failure to submit timely and accurate financial reports may result in noncompliance with federal regulations, potential withholding of future funding, and increased risk of questioned costs or audit findings. Cause: The delays and inaccuracies were attributed to inadequate internal controls over the financial reporting process, including lack of review procedures and insufficient training of staff responsible for preparing the reports. Recommendation: We recommend the entity strengthen its internal controls over the financial reporting process by implementing formal review procedures, providing staff training on federal reporting requirements, and establishing a calendar system to ensure timely submissions.