Finding 1238406 (2025-001)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2025

Accepted

2026-09-29

Audit: 413272

Organization: Hancock Rural Telephone Corporation (IN)

Auditor: ALDRICH CPAS + ADVISORS LLP

AI Summary

Core Issue: The Cooperative lacks written procedures for determining the allowability of costs under federal program 21.027.
Impacted Requirements: This noncompliance violates 2 CFR Part 200.302(b)(7), which mandates such procedures.
Recommended Follow-Up: Management should finalize and implement the written procedures to prevent unallowable costs from being charged to the program.

Finding Text

Finding 2025-001 Identification of the federal program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Noncompliance over policies Criteria: 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition: The Cooperative has not developed written procedures for determining the allowability of costs. Cause: Management did not have written procedures for determining the allowability of costs. Effect: Unallowable costs could be charged to the program. Questioned costs: None Recommendations: Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of responsible officials: Management understands and agrees with the finding and has developed written procedures to be used for any future grants.

Corrective Action Plan

Management acknowledges the finding and agrees that written procedures for determining the allowability of costs were not formally documented as required. As the Cooperative continues to mature its federal grant management practices, this gap has been identified and addressed. Written procedures for determining the allowability of costs have been developed and are now in place to be used for any future grants. Finance management will monitor adherence to these procedures and incorporate them into the broader financial policies framework to ensure continued compliance with applicable federal requirements going forward.

Other Findings in this Audit

1238407 2025-002

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
21.027	CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS	$3.90M