Finding Text
2022-2 Criteria or Specific Requirement - The Uniform Guidance Section 200.303 requires non-Federal entities to establish and maintain effective internal control over the Federal awards 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. Management is responsible for establishing and maintaining processes and internal control over financial reporting. Processes and internal control should allow management or employees, in the normal course of performing their assigned functions to prevent or detect misstatements. Condition and Context - The Organization did not maintain internal reporting sufficient to substantiate the funds requested through the Payment Management Services ("PMS") portal. Effect - The lack of internal reporting to substantiate the Organization's periodic drawdown requests puts the Organization at risk for errors in its submissions that could result in an incorrect drawdown. During the audit period, the Organization requested and received approximately $140,000 more in reimbursements through PMS than was expended, resulting in unallowable costs. Cause - Lack of experienced and knowledgeable staff to implement sufficient internal control. Recommendation - The Organization should consider hiring more experienced and knowledgeable accounting staff. We believe that due to the size and complexity of the Organization, more experienced and knowledgeable staff is warranted. Views of Responsible Officials and Planned Corrective Action - Management agrees with the finding. The Organization has implemented a new reporting and approval process for submissions through the Payment Management System: ? A Detailed Statement of Activity is generated by the Director of Finance as soon as it is determined all revenues and expenditures have been recorded for the month. ? Report is reviewed and approved by Co-Executive Director. ? Director of Finance submits the reports in PMS and requests reimbursement. The Organization has hired a new Director of Finance with extensive experience in non-profit accounting.