Finding Text
Criteria: Federal awarding agencies and pass-through entities require recipients to submit periodic financial and performance reports, including but not limited to cash reconciliation reports, quarterly reports, and final expenditure reports, within specified deadlines. These reports must be accurate, complete, and supported by underlying accounting records. Additionally, recipients are required to establish and maintain effective internal controls to ensure the accurate preparation, reconciliation, and timely submission of all required federal reports in accordance with 2 CFR 200.302 and 2 CFR 200.303. Condition: The District did not consistently file required federal reports within established deadlines. Specifically, certain required quarterly cash reconciliation reports were submitted after the required due dates, and in some instances, required reports were not submitted. Additionally, the District was unable to provide adequate supporting documentation to reconcile reported expenditures to the general ledger for certain federal reports. Furthermore, required final expenditure reports were not always submitted after funds were fully expended. These issues were noted across multiple federal programs, indicating deficiencies in the District’s overall internal controls over federal reporting. Cause: The District's internal controls and review process over federal reporting were not operating effectively. There was a lack of adequate supervisory review and monitoring to ensure that all federal reports were prepared accurately, reconciled to the general ledger, and submitted in a timely manner. Effect: The District is not in compliance with federal reporting requirements. Failure to submit accurate and timely reports could result in delayed reimbursements, increased scrutiny by federal and pass-through agencies, or potential withholding or loss of federal funding. Questioned Costs: None Recommendation: We recommend that the District strengthen internal controls over federal reporting for all federal programs. The District should implement formal procedures to ensure that all required federal reports are prepared accurately and completely, reconciled to the general ledger, reviewed by appropriate supervisory personnel, and submitted timely in accordance with federal and pass-through agency requirements. Additionally, the District should provide training to personnel responsible for federal reporting and implement a monitoring process to ensure ongoing compliance with federal requirements. Views of Responsible Officials: Management is in agreement with the finding. Prior Year Finding: 2023-02