Finding 16023 (2022-002)

2022-002 United States Department of Agriculture 10.863 Preparation of the Schedule of Expenditures of Federal Awards Significant Deficiency in Internal Control Over Compliance Criteria ? Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule. Condition ? The Cooperative does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. We were requested to draft the Schedule. Cause ? Auditor assistance with preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required with the Cooperative meets a specified threshold of federal expenditures. Effect ? There is a reasonable possibility that the Cooperative would not be able to draft a Schedule that is correct without assistance of the auditors. Questioned Costs ? None reported. Context ? Sampling was not used. Repeat Finding from Prior Years ? No Recommendation ? We recommend management be aware of the financial reporting requirements relating to the Cooperative?s schedule of expenditures of federal awards and internal controls that impact financial reporting. Views of Responsible Officials ? Management agrees with the finding.