Finding Text
Finding No.: 2024-013 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories/ Federal Award No.: Compact of Free Association, As Amended Area: Period of Performance Questioned Costs: $0 Criteria: 2 CFR 200.303(a) states that a recipient of a Federal award must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: RepMar lacks adequate internal controls, as required by 2 CFR 200.303(a), to provide reasonable assurance that costs charged to Federal awards are incurred within the approved period of performance. Cause: Adequate internal controls have not been implemented, as required. Effect or Potential Effect: The lack of adequate internal controls over period-of-performance requirements increases the risk that expenditures may be charged to the Federal award outside the period of performance and not be timely detected. No questioned cost is reported because the condition relates to inadequacies in internal control policies and procedures. Identification as a Repeat Finding: 2023-015 Recommendation: RepMar should implement adequate internal controls over compliance with period of performance requirements. Views of Responsible Officials: The Bisan system includes functionality to control expenditures within a specified funding period, typically the Budget Period or Period of Performance. These are the Start Date, End Date and Closing Date in each SPG code setup. The Ministry utilizes this feature to help ensure compliance with funding requirements. The Ministry acknowledges, however, that the process still requires human input and oversight. As a result, there remains a risk that expenditures may be processed or incurred outside the approved funding period due to human error. The Ministry will reinforce and continue to strengthen its review and monitoring procedures to minimize this risk and ensure expenditures are charged to the appropriate funding period.