Finding Text
U.S. Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Reporting Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with the conditions of the award. Condition: The Center does not have an internal control system designed to provide for review and approval of the quarterly form RD 442-2, Statement of Budget, Income, and Equity (OMB No. 0575-0015) reports submitted. Cause: The Center?s internal controls were not established to cover quarterly reporting to the federal agency. Effect: There is a potential that the Center?s form RD 442-2 could contain errors in financial information. Questioned Costs: None reported Repeat Finding from Prior Years: No Context: No sampling was performed. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Center?s quarterly filings and implement controls to ensure the accuracy of the filed reports, which should include an independent review and approval. Views of Responsible Officials: Management agrees with the finding.