Finding Text
2024-002 – Lack of Segregation of Duties—Grant Report Approval and Submission Federal Agency: Department of the Treasury Award Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2024 Compliance Requirement: Reporting Type of Finding - Compliance Internal Control over Compliance – Significant Deficiency Condition: During our audit of the Town’s federal grant programs, we noted that the Town Accountant is solely responsible for both completing, approving, and submitting certain reports, required under the State and Local Fiscal Recovery Fund grant, to the United States Treasury. A secondary independent review or approval process is not in place prior to submission. Criteria: Uniform Guidance (2 CFR 200.303) requires non-federal entities to establish and maintain effective internal controls over federal award reporting that provide reasonable assurance that records are accurate, complete, and in compliance with federal statutes, regulations, and the terms and conditions of the award. Effective internal control includes appropriate segregation of duties. Cause: This situation results primarily from the Town’s limited administrative staffing, which restricts the ability to segregate the reporting and approval functions among different individuals. Effect: The lack of segregation of duties increases the risk that errors or noncompliance with federal award requirements in grant reporting could occur and not be prevented or detected in a timely manner. Recommendation: We recommend the Town implement a secondary review of grant reports, for any type of grant that requires external reporting to the grantor entity, prior to submission. This review could be performed by another member of management, or another designated official, and should be documented as evidence of oversight. If staffing limitations make this impractical, consider periodic and documented retrospective reviews of submitted reports. Views of Responsible Officials: The Town acknowledges the finding and recognizes the importance of maintaining adequate internal controls over federal grant reporting, including appropriate segregation of duties. We will be implementing additional procedures to ensure adequate preparation and review procedures to ensure accurate reporting to oversight agencies.