Finding 1206100 (2023-002)

Reference Number: 2023-02 Finding: Finding Type: Significant Deficiency in Internal Control Over Compliance Title and ALN of Federal Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Criteria or Specific Requirement: A. Activities Allowed or Unallowed – 2 CFR section 200.303 of the Uniform Guidance requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: During the audit, it was noted that the Organization was unable to provide formal support for the internal review of costs submitted to the pass-through grantor under the major program. Cause: The Organization lacks established procedures which provide formal evidence that the allowability, accuracy and completeness of transactions were verified before submission. Effect or Potential Effect: Without adequate internal controls in place to ensure that all charges to the federal program are properly reviewed for allowability, the Organization faces increased risk of noncompliance with the allowability requirement and could request funds for unallowed costs. Questioned costs: None Identification as a Repeat Finding: N/A – this was not reported as a finding in the prior audit report. Context: There is no formal approval for costs submitted to the pass-through grantor under the major program. Recommendation: We recommend that the Organization implement a formal process for approval of charges to federal programs before submission. Views of Responsible Officials: Management agrees with the finding and recommendation.