Finding Text
Criteria: 2 CFR 200.303 requires nonFederal entities to “establish and maintain effective internal control over the Federal award” to provide reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the award. This includes adequate controls over the accuracy, completeness, and reliability of reporting. Statement of Condition: During reporting testing for Program 14.251, it was noted that the organization does not have a documented internal review or approval process governing the preparation and submission of required Federal reports. Although the HUD grant agreement does not explicitly require a presubmission review, the Federal award is still subject to the internal control requirements of 2 CFR 200.303, which require the entity to maintain effective controls over reporting. Cause: The organization has not formally established, documented, or implemented a comprehensive internal control framework over the reporting process, including supervisory review requirements. Effect or Potential Effect: The absence of a documented and consistently applied review process increases the risk that Federal reports may contain errors, omissions, or unsupported information, which could affect compliance with Federal reporting requirements and reduce the reliability of information used for program oversight. Questioned Costs: $- Recommendation: Management should develop, implement, and document a formal, comprehensive internal review and approval process for all required reports submitted under federal awards. The process should: define supervisory review responsibilities; require documented evidence of review (e.g., signoff, checklist, or electronic approval); and be consistently applied across all reports submitted for federal programs. Management Response: See corrective action plan.