Finding 1227151 (2025-002)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-08-18

AI Summary

  • Core Issue: The entity submitted a quarterly report with incorrect expense information, violating federal reporting requirements.
  • Impacted Requirements: This finding breaches 2 CFR §200.328(b)(1) and 2 CFR §200.303, which mandate accurate and compliant financial reporting.
  • Recommended Follow-Up: Strengthen controls over grant reporting to ensure all discrepancies are resolved before submission and reports are reconciled with supporting records.

Finding Text

Finding 2025-002: Inaccurate Expense Reporting on Quarterly Report Significant Deficiency ARPA, AL 21.027 Criteria: In accordance with 2 CFR §200.328(b)(1), non-Federal entities are required to submit performance and/or financial reports on a regular basis as specified in the terms and conditions of the award. Effective internal controls, as outlined in 2 CFR §200.303, require that entities establish and maintain processes to ensure reliable reporting and compliance with federal requirements. Condition: During our review of the entity’s reporting procedures, we noted that one quarterly report submitted by the entity included incorrect expense information. Cause: The entity’s review process identified notes to correct on the quarterly report, however the report was submitted without corrections made. Effect: The submission of inaccurate expense information may result in reliance on incorrect financial data by the granting agency, and may affect future funding decisions or lead to additional oversight. Identification as a Repeat Finding: This is a new finding for fiscal year 2025. Recommendation: We recommend that the entity strengthen its controls over grant reporting to ensure that reviewed reports are reconciled to supporting records and that all identified discrepancies are resolved prior to submission. Views of Responsible Officials: See the attached Corrective Action Plan.

Corrective Action Plan

The District concurs with the finding. Although the District's review process identified corrections, the process did not require a final verification that all reviewer comments had been incorporated into the version submitted. The District will take the following actions: 1. Require the preparer to reconcile reported expenditures to the general ledger, reimbursement requests or invoices, and relevant project records before submitting the report for review. The reconciliation will be retained with the report. 2. Use a version-controlled Quarterly Report Review Checklist and corrections log that identifies each reviewer comment, the required correction, the preparer's disposition, and the date completed. 3. Require the preparer to certify that all review comments have been resolved and incorporated into the final report. 4. Require the independent reviewer to perform and document a final comparison of the approved report to the reconciliation and corrections log. No report may be submitted until the reviewer has marked the final version 'Approved for Submission.' 5. Retain the signed checklist, reconciliation, corrections log, approved final report, and proof of submission. The Finance Manager will periodically review grant-reporting files to verify that the control is operating as designed. Person Responsible for Corrective Action: William Clayton, Finance Manager Anticipated Completion Date for Corrective Action: September 30, 2026. Final reviewer approval and document-retention controls will be effective immediately, with the revised checklist, written procedures, and staff training completed by this date.

Categories

Internal Control / Segregation of Duties Reporting Significant Deficiency Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 1227150 2025-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $1.41M