Finding Text
Federal Agency: U.S. Department of Homeland Security Federal Program Name: Disaster Grants – Public Assistance Assistance Listing Number: 97.036 Federal Award Identification Number and Year: FEMA-4630-DR-KY - 2024 Pass-Through Agency: Commonwealth of Kentucky, Department of Emergency Management Pass-Through Number(s): 083-U5TN-00 Award Period: 3/1/2024 – 6/10/2026 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Under uniform guidance, 2 CFR 200.303, the recipient 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. Under Uniform Guidance, the Organization is required to submit financial reports in the same method in which their financial statements are prepared, accrual basis under US GAAP. Condition: In our testing, we noted the following: 1. There was no evidence that the quarterly reports were reviewed and approved by someone other than the person who prepared the report prior to being submitted to the grantor. 2. The reports were not prepared on an accrual basis of accounting. Questioned costs: None Context: For 2 of the 4 reports tested, we noted that expenditures reported on the quarterly report did not match the accrual basis accounting records. For 4 of the 4 reports tested, we noted there was no review and approval of the report by someone other than the person that prepared the reports. Cause: Clerical oversight and lack of established controls Effect: Reports could be improperly prepared. Repeat Finding: No Recommendation: We recommend that management implement and system of internal controls to ensure that reports are reviewed by a second person and that the reports are reconciled to the Organizations accrual basis accounting records. Views of responsible officials: There is no disagreement with the audit finding