Finding Text
2025-004 — NONCOMPLIANCE WITH QUARTERLY REPORTING REQUIREMENTS Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards and (G) Instance of Non-compliance related to Federal Awards Funding Agency: U.S. Department of the Treasury Pass-through Entity: New Mexico Department of Finance and Administration (NMDFA) Program: COVID 19 - Coronavirus State & Local Fiscal Recovery Fund AL #: 21.027 Award #: CSLFRF-DFA_DAC-22-ZG1024 Award Period: October 5, 2022 – June 30, 2025 Type of Compliance Requirement: Reporting Questioned Costs: None Condition For the audit period, the Jetport was unable to provide copies of the required quarterly report workbooks and/or evidence of submission to NMDFA (e.g., email confirmations, portal confirmations, or other documentation) for the quarters ended: September 30, 2024, December 31, 2024, March 31, 2025, and June 30, 2025. As a result, we could not verify that required quarterly reporting was completed and submitted timely in accordance with the subaward requirements. Criteria The NMDFA subaward agreement requires subrecipients to complete and submit the CSLFRF Subrecipient Quarterly Report Workbook to NMDFA within ten (10) days after quarter-end (September, December, March, and June). In addition, non-federal entities must establish and maintain effective internal control over federal awards and retain records sufficient to demonstrate compliance with federal award requirements. Cause The grant administrator responsible for the project retired, and current staff were unable to locate historical records related to the quarterly reports. Additionally, there appears to have been insufficient record retention and oversight procedures to ensure continuity of compliance during personnel transitions. Effect The lack of documentation supporting quarterly reporting limits transparency and accountability over the use of federal funds and increases the risk that required reporting was incomplete, inaccurate, or untimely. It also impairs the pass-through entity’s ability to support its reporting and monitoring responsibilities. Recommendation We recommend Jetport strengthen its internal controls over grant compliance by implementing formal procedures to ensure timely preparation, review, and submission of all required reports. Implement formal grant reporting controls including: (1) a compliance calendar with due dates; (2) documented supervisory review and sign-off prior to submission; (3) centralized electronic retention of submitted reports and submission evidence; and (4) cross-training/transition procedures for key grant compliance roles.