Finding Text
2022‐005 Department of Agriculture
Federal Assistance Listing #10.766
Community Facilities Loans and Grants Cluster
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
federal statutes, regulations, and conditions of the federal award.
Condition ‐ During our testing, we noted a lack of documentation of a secondary review on the RD442‐2 forms
submitted to the USDA.
Cause ‐ The Organization did not have an adequate internal control policy in place to ensure the review and
approval of the report was documented.
Effect ‐ The lack of adequate policies governing review and approval increase 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.
Context ‐ A selection of four quarterly reports out of total population of eight were tested. Documentation of a
secondary review was missing from two quarterly reports.
Repeat Finding from Prior Years ‐ No
Recommendation ‐ We recommend that the Organization enhance internal control policies to ensure that formal
documentation of the reviews are present.
Views of Responsible Officials ‐ Management agrees with the finding.