Finding 192 (2022-003)

Material Weakness

Requirement

Questioned Costs

Year

2022

Accepted

2023-10-11

Audit: 297

Organization: Nulato Tribal Council (AK)

Auditor: Altman Rogers & CO

AI Summary

Core Issue: There is a material weakness in internal controls over compliance, leading to significant uninsured cash balances of $9,328,634.
Impacted Requirements: The Council failed to comply with 2 CFR Section 200.305, which mandates that federal funds must be held in insured accounts.
Recommended Follow-Up: Management should implement stronger policies and controls to monitor insured cash balances and ensure compliance with federal funding requirements.

Finding Text

Federal Agency: U.S. Department of the Treasury Federal Programs: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award Numbers: SLFRP3168/5205 Award Years: 2021 Type of Finding: Material weakness in internal control over compliance and material noncompliance Criteria: In accordance with 2 CFR Section 200.305, advanced federal funds held in depository institutions must be deposited and maintained in insured accounts. Condition and Context: Internal control procedures related to monitoring insured cash balances were inadequate. The Council had advanced federal funds (deferred revenue) of $10,512,764 as of September 30, 2022. Uninsured and uncollateralized cash balances were $9,328,634 as of September 30, 2022. Cause: Lack of internal controls over the monitoring of insured cash balances. Effect: Failure to follow granting agency requirements could result in loss of federal funding or at a minimum, the Council having to repay portions of the advanced federal funds. Questioned Costs: None. Repeat Finding: This is a repeat of Finding 2021-001, and since this is a repeat finding we believe it to be a systemic issue. Recommendation: We recommend that management that the Council establish policies and controls over special tests and provisions related to monitoring advanced funds to ensure federal funds are properly held in fully insured depository accounts. Management’s Response: Management concurs with this finding. See corrective action plan.

Corrective Action Plan

Finding 2022-003 Lack of Internal Controls Over Cash Management Name of Contact: Martha Turner, Tribal Administrator Corrective Action Plan: We concur with the recommendation. Funds to transferred to NorthRim Bank on January 17, 2023 resulting in compliance with 2 CFR Section 200.305 advanced federal funding. The service being used to insure all deposits is called IntraFI Cash services. This is a sweep account that will automatically move all deposits to other financial institutions to assure that they are under the 250,000 limit. Funds are wholly available at any time. Proposed Completion Date: Already implemented.

Other Findings in this Audit

193 2022-004

Material Weakness
576634 2022-003

Material Weakness
576635 2022-004

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
21.027	Coronavirus State and Local Fiscal Recovery Funds	$1.41M
15.022	Tribal Self-Governance	$611,106
16.841	Voca Tribal Victim Services Set-Aside Program	$134,277
16.731	Tribal Youth Program	$84,361
16.710	Public Safety Partnership and Community Policing Grants	$73,554
20.205	Highway Planning and Construction	$70,686
66.926	Indian Environmental General Assistance Program (gap)	$50,295
21.023	Emergency Rental Assistance Program	$27,314
15.156	Cooperative Landscape Conservation	$13,719
15.020	Aid to Tribal Governments	$13,186
15.133	Native American Business Development Institute	$10,000
93.671	Family Violence Prevention and Services/domestic Violence Shelter and Supportive Services	$4,239
14.867	Indian Housing Block Grants	$4,222
16.608	Tribal Court Assistance Program	$750