Finding 396506 (2023-001)

Condition Management did not report the total federal awards expended during the year under audit. Subsequent to issuance of the September 30, 2023 financial statements, management was made aware by the awarding agency that funds the Authority received were federal awards and had federal compliance requirements. Criteria Part 200, Uniform Guidance section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal awards. 45 CFR Part 75 Subpart F requires that a non-federal entity that expends $750,000 or more during the entity's fiscal year in federal awards must have a single audit and that the entity must prepare a schedule of expenditures of federal awards for the period covered by the entity's financial statements which must include the total federal awards expended. Cause The member of management responsible for reporting federal awards was unaware that funds received were a sub-award of federal award from a non-federal entity and, therefore, certified a submission to the federal audit clearinghouse that was not complete and accurate. Effect Potential material noncompliance with federal compliance requirements. Questioned Costs There are no questioned costs associated with finding. Context The award was issued in the form of one check which the Authoirty immediately remitted to a federal project partner for the Authority's share of the project local match. Historically, the Authority has had adequate internal controls over compliance of federal awards. Had the member of management responsible for reporting federal awards been aware of the federal award status of the funds they likely would have reported a complete and accruate schedule of expenditures of federal awards. Repeat Finding This is not a repeat finding. Recommendation The Authority should establish documented controls and a review process for funds received that includes a signed agreement detailing the Authority's responsibilities in relation to the funding and identifying the individuals responsible for meeting responsibility requirements. View of Responsible Officials and Planned Corrective Actions The Authority concurs with the finding and has provided a response in the Corrective Action Plan.