Finding Text
Material Weakness in Internal Controls over Compliance Condition: During our testing of matching, level of effort, and earmarking, it was noted the Organization did not perform or document required controls over matching, level of effort, and earmarking requirements. Criteria: Per § 200.303 of the Code of Federal Regulations, recipients must establish, document, and maintain internal controls over Federal awards that provides reasonable assurance that the recipient is managing the Federal Award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Cause: Controls to document proper tracking of matching, level of effort, and earmarking were not implemented by the Organization. The responsibility for oversight along with monitoring activities was not documented. Effect: Failure to establish, document, and maintain internal controls increases the risk that federal funds may not be used in accordance with applicable laws and regulations, potentially resulting in noncompliance with program requirements. Context: During our testing of matching, level of effort, and earmarking requirements, no evidence of controls over the compliance requirement could be provided. Recommendation: We recommend the Organization develop and implement formal documented monitoring procedures to ensure accuracy and track compliance with matching, level of effort, and earmarking requirements. Views of Responsible Officials: Management agrees with the finding.