Finding Text
Criteria: Under 2 CFR 200.303, non-federal entities must establish, document, and maintain effective internal control over federal awards to provide reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. In addition, the grant agreement requires semi-annual reports to be submitted no later than 30 days after the end of each reporting period. Condition: During our testing of semi-annual reporting requirements, we selected 2 of 2 reports due during the year ended December 31, 2025. Both semi-annual reports tested were submitted after the required due date. In addition, management did not maintain documentation evidencing that the reports were reviewed and approved by a secondary level prior to submission. We also noted that internal controls were not designed effectively to ensure semi-annual reports were prepared, reviewed, approved, and submitted within the required timeframe. Cause: The Organization did not have a sufficiently designed and documented control process to monitor reporting deadlines, assign responsibility for timely submission, and retain evidence of secondary-level review and approval before reports were submitted. Specifically, existing procedures did not include an effective mechanism, such as a reporting calendar, escalation process, or documented supervisory review requirement, to ensure timely filings. Effect: Failure to submit required reports by the deadline results in noncompliance with the terms and conditions of the grant agreement and may impair the federal agency’s ability to monitor program performance and compliance on a timely basis. Questioned Costs: No questioned costs were identified as a result of this finding because the matter relates to timeliness of reporting and internal control over report review rather than the allowability of expenditures. Perspective: The audit procedures covered 2 of 2 semi-annual reports required to be submitted during the year. Both reports tested were submitted late, representing 100% of the reports subject to testing for the period under audit. This testing was not based on a statistically valid sample because the entire population of reports due during the year was tested. Recommendation: We recommend that management strengthen internal controls over grant reporting to ensure compliance with reporting deadlines and review requirements including: development of a grant reporting calendar that identifies all required reports, reporting period end dates, due dates, preparer responsibilities, reviewer responsibilities, and submission requirements, retain documentation evidencing the preparer, reviewer, date of review, approval, and date of submission and establish a monitoring or escalation process to ensure reports are completed and submitted before the required deadline.