Finding Text
Need for Formalization and Documentation of Grant-Specific Policies, Procedures, and Internal Controls. The Company maintains general internal controls and operational, administrative, and accounting procedures for the reasonable management of its operations, including controls applicable to restricted funding programs. However, during the audit procedures performed to evaluate and verify the establishment and implementation of policies, procedures, and internal controls required for the administration of the FEMA Public Assistance Program (ALN 97.036 – PA-4339), we noted that certain grant-specific policies, procedures, and internal controls had not yet been fully formalized and documented in accordance with the applicable grant agreement, federal regulations, and FEMA guidance. During our audit procedures, we noted that documentation evidencing the formal communication, implementation, and training of personnel responsible for grant administration and compliance functions was initially limited. As a result, certain policies and procedures applicable to the administration of the grant had not yet been formally customized or documented to specifically address all FEMA Public Assistance compliance requirements. These areas included, but were not limited to, the following: Financial Policies and Procedures, Policies and Procedures for Property and Equipment, Policies and Procedures for Allowability of Costs, Policies and Procedures for Disbursements, Policies and Procedures for Cash Management and Cash Advances. However, based on the audit procedures performed, we were able to corroborate that management had substantially developed and formalized the policies, procedures, controls, systems, and compliance documentation necessary for the administration of the federal award. Certain policies and procedures that had not yet been fully finalized at the time of our audit procedures were in process of completion and/or had been scheduled by management for completion and implementation. Additionally, no questioned costs resulted from this matter, as the Company ultimately maintained supporting documentation for the transactions tested and adequately identified and documented grant-related expenditures.