Finding Text
Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D23AF00017, D22AF00010, D23AF00010, D22AF00011, D22AF00014, D23AF00016, D22AF00012, D23AF00015 Area: Reporting Questioned Costs: $0 Criteria: In accordance with applicable reporting requirements, and Article VI, Section 1(b)(1) of the Fiscal Procedures Agreement, the FSM National Government is required to submit quarterly Federal Financial Reports (SF-425) that are accurately presented, comparable and reconcilable. Condition: Of eight SF-425 reports tested, the following were noted: 1. For two (or 25%), the total federal share of expenditure on the underlying accounting records had variances to the total reported in the SF-425 reports. 2. For 6 (or 75%), FSM National Government did not provide an SF-425 Report. Cause: 1. FSM National Government did not effectively monitor compliance with applicable reporting requirements to ensure reports are accurate and reconciled to underlying accounting records. 2. FSM National Government lacks adequate documentation and systematic filing of relevant documentation for reporting requirements. Effect: The State is in noncompliance with applicable reporting requirements. Identification as a Repeat Finding: 2022-011 Recommendation: 1. FSM National Government should strengthen and enforce compliance over the implementation of more stringent monitoring mechanisms to ensure reports are accurately presented and reconciled to the underlying accounting records. 2. FSM National Government should improve its file maintenance system to help ensure documents over compliance requirements can be easily retrieved. Views of Responsible Officials: Management disagrees with the finding. Refer to FSM NG’s Views of Responsible Officials for their detailed response. Auditor Response: Fiscal Procedures Agreement was used from the start as a guideline for compliance testing. Noncompliance is due to lack of supporting documentation such as SF-425 reports and Fundware Reports, made available to the auditors during the time of audit.