Finding Text
Federal Agency: U.S. Department of Agriculture ("USDA") Federal Program Name: Community Facilities Loans and Grants Assistance Listing Number: 10.766 Federal Award Identification Number and Year: Award #'s 97-01, 97-02, 97-03, & 97-04 (Year 2023) Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 01/01/2023 – 12/31/2023 Compliance Requirement Affected: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: USDA Community Facilities loan and grant agreements require the auditee to submit audited financial statements to USDA as part of ongoing reporting requirements. Management and the Board are responsible for ensuring compliance with reporting provisions, including retaining evidence of submission. Condition: During testing of reporting requirements, the auditee was unable to provide evidence that the most recent audited financial statements (for fiscal year 2022) were submitted to USDA. Management stated that no documentation, emails, or confirmations supporting submission of the FY 2022 audited financial statements could be located, and no follow-up requests from USDA were identified. Questioned costs: None Context: The auditee participates in the USDA Community Facilities Loans and Grants program, which requires submission of audited financial statements to USDA. During testing of the submission of the most recent audited financial statements (fiscal year 2022) reporting requirement, the auditee was unable to provide documentation evidencing that the audited financial statements were submitted, indicating the reporting control did not operate as intended. Cause: The auditee did not maintain adequate documentation or monitoring controls to ensure and retain evidence that audited financial statements were submitted to USDA for FY 2022. Effect: As a result, the auditee has no basis to conclude that the required FY 2022 audited financial statements were submitted to USDA, resulting in noncompliance with federal reporting requirements. Repeat Finding: Not a repeat finding. Recommendation: We recommend that management implement and document controls to ensure: Timely submission of audited financial statements to USDA, and Retention of adequate documentation evidencing submission (e.g., confirmations, portal uploads, or correspondence), with oversight by the Board of Directors. Views of responsible officials: There is no disagreement with the audit finding.