Finding 1239208 (2025-002)

Federal Agency: U.S. Department of Agriculture Federal Program Name: Environmental Quality Incentives Program Assistance Listing Number: 10.912 Federal Award Identification Number and Year: NR243A750011G009 - 2024 Award Period: 9/1/24-9/29/29 Type of Finding: Significant Deficiency in Internal Control over Compliance Compliance Requirement: Cash Management Criteria or specific requirement: Grant claims filed by the Organization to granting agencies must be accurate, reconcile to the Organizations general ledger system and for cost-reimbursable grants, represent costs incurred. Internal controls should be signed and implemented to prevent and detect errors in the data reported on the grant claims. Segregation of duties is an internal control intended to prevent or decrease to occurrence of errors or intentional fraud. Segregation of duties ensure that no single employee has control over all phases of a transaction. There should be a secondary review of each grant claim prior to being certified and filed to ensure that there are no errors, irregularities, or misrepresentations. Condition: Of the 5 claims for reimbursement selected for testing, noted 2 did not have a formal review documented by someone other than the preparer. Accordingly, this does not allow for a proper segregation of duties for internal control purposes over the cash management compliance requirement. Questioned costs: None Context: While performing audit procedures, it was noted that two of five grant claims tested that were submitted for reimbursement did not have formal documentation of review by someone other than the preparer. This was a finding in the prior year audit and a plan was put into place in September 2025 to address the issue but was not implemented for part of the period under audit. Cause: Due to the timing of when the formal procedures were put in place. Effect: Over- or under-reporting certain items for reimbursement on claims if there are no reviews in place. Repeat Finding: Repeat Finding 2024-003 Recommendation: We recommend the Organization implement a formal control where someone other than the preparer document their review of the claim prior to submitting to the federal agency. This review would include comparing the amounts in the report to the general ledger or other supporting documents. This review should be supported by documenting the signature and date prior to submission. Views of responsible officials: There is no disagreement with the audit finding.