Finding Text
FINDING 2023-001 - RISK ASSESSMENT PROCESS RELATED TO COMPLIANCE
REQUIREMENTS (Repeat Finding of 2022-001)
Material Weakness
Federal Programs: Charter Schools – Assistance Listing Number 84.282; Education Stabilization Fund –
Assistance Listing Number 84.425
Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding
number was 2022-001.
Criteria
2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that
the Organization must, among other things, “establish and maintain effective internal control over the
Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award
in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These
internal controls should be in compliance with guidance in “Standards for Internal control in the Federal
Government” issued by the Comptroller General of the Unites States of the “Internal control Integrated
Framework:, issued by the Committee of Sponsoring Organization of the Treadway Commission (COSO)”.
Condition
The Organization has not established a formal process related to federal awards to identify all key
compliance requirements and changes in compliance requirements, evaluate risks of noncompliance with
these requirements, and respond to such risks of noncompliance through establishing or changing processes
and internal controls. The Organization also implements the use of federal funds through different
departments. Certain individuals, within a department, responsible for the use of federal funds or
maintenance and safeguard of assets acquired with federal funds lacked knowledge of the compliance
requirements pertaining to the use of the funds or the maintenance and safeguard of the acquired assets.
Cause and Effect
The material weakness resulted in the noncompliance findings described in items 2023-002 and 2023-003.
Recommendation
We recommend additional resources be allocated to federal award compliance to review federal award
provisions and requirements, evaluate risks of noncompliance, and respond to such risks through internal
controls. The process should include methods to identify and communicate changes to federal award
requirements to all key individuals within the Organization and to verify internal controls are implemented
correctly and are operating effectively.
Views of Responsible Officials and Planned Corrective Actions
The Organization’s Corrective Action Plan is included on pages 43 and 44.