Finding 369634 (2022-003)

2022-003 Department of Agriculture Federal Assistance Listing/CFDA #10.766 Community Facilities Loans and Grants Special Tests and Provisions 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 federal statutes, regulations, and conditions of the federal award. Condition During our testing, there was no formal review of the reserve fund reconciliation for the federal program. Cause The Authority did not have an adequate internal control policy in place to ensure review and approval over the reserve fund. Effect The lack of adequate policies governing review increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs None reported. Context/Sampling Sampling was not used. The Authority has one reserve account that was tested. Repeat Finding from Prior Years No Recommendation We recommend that the Authority enhance internal control policies to ensure that formal documentation of reviews is present. Views of Responsible Officials Management agrees with the finding.