Finding 1220646 (2025-003)

Item 2025-003: Material Weakness in Internal Control Over Compliance - Cash Management Federal agency: • U.S. Department of Agriculture • U.S. Department of Commerce Federal program: • Environmental Quality Incentives Program (ALN 10.912) • Habitat Conservation (ALN 11.463) Pass-through Entity: None Federal Award Year: Year ended September 30, 2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to review reimbursement requests. Condition: During our testing of cash management requirements, we noted that a review of the reimbursement requests sampled for testing was not performed prior to submission. Cause: The Band does not have a procedure for a review of the reimbursement requests prior to submission for the identified programs. Currently, the same employee prepares and submits the reimbursement requests. Effect: Likelihood of inaccurate reimbursement requests is increased when they are not thoroughly reviewed. Questioned costs: None Context: • ALN 10.912 – The population of reimbursement requests subject to cash management requirements included one request. Our sample included one reimbursement request which did not have documentation showing it was reviewed. • ALN 11.463 – The population of reimbursement requests subject to cash management requirements included eight requests. Our sample included two reimbursement requests which did not have documentation showing they were reviewed. Repeat finding: No Recommendation: We recommend that the Band review their processes to ensure all reimbursement requests have review a process documented indicating that a secondary review was performed prior to submission. Views of responsible officials: The Band agrees with the above finding and its response is included in the corrective action plan.