Finding Text
Criteria: In accordance with 2 CFR 200.303(a), a formalized system of internal control should be established, documented, and maintained to ensure that performance reporting information for each award is reliably captured and included in the applicable reports. Condition/Context: During our testing of the Reporting compliance requirement, specifically performance reporting, we noted that the Organization did not have any formal internal control procedures in place to ensure the accuracy, completeness, and timely submission of required performance reports. For the three performance reports tested, there were no documented review procedures or approvals to validate the information reported to the funding agencies. Our testing did not identify any instances of noncompliance; however, the absence of an internal control represents a breakdown in the control activities for the compliance area. Cause: Management had not implemented a formal internal control policy over the performance reporting process. Effect/Possible Effect: Failure to adequately maintain a system of internal control increases the risk of submitting inaccurate, incomplete, unsupported, or untimely reports. Questioned Costs: No questioned costs were identified as part of this finding. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization design and implement formal internal control policies and procedures over the Reporting compliance requirement which includes, but is not limited to, documented preparation, review and approval of the reports and retention of supporting documents for all applicable information included within the reports. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to design and implement formalized internal control policies and procedures specific to the Reporting compliance requirement and are in the process of doing so.