Finding Text
Criteria or specific requirement: 2 CFR §200.303, Internal Controls, requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance the entity is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls include procedures to ensure financial reports submitted to federal agencies are accurate, complete, and reviewed prior to submission. Condition: The Organization did not have a documented review and approval process for Federal Financial Reports (FFRs) prior to submission to the granting agency. Questioned costs: None. Context: During testing of Federal Financial Reporting, CLA noted that the one Federal Financial Report submitted during the audit period was prepared and submitted without evidence of review or approval by an individual independent of the preparer. Cause: Management had not established a formal review and approval control over the preparation and submission of Federal Financial Reports. Effect: Federal Financial Reports may be submitted with inaccurate, incomplete, or unsupported information, resulting in noncompliance with federal reporting requirements and potentially affecting grant funding and monitoring decisions. Repeat finding: No. Recommendation: The Organization should implement a documented review and approval process for all Federal Financial Reports prior to submission. Evidence of review and approval should be retained to demonstrate compliance with federal reporting requirements and to help ensure reports are accurate and complete. Views of responsible officials: There is no disagreement with the audit finding.