Finding 403886 (2023-002)

Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Allowable Costs/Cost Principles) Federal Program. COVID-19 Provider Relief Funds and American Rescue Plan (ARP); Rural Distribution; Directly funded (ALN # 93.498) Criteria. The Uniform Guidance requires that the Organization have written policies covering payments, procurement, allowability of costs charged to federal programs, compensation, and travel costs. Condition. The Organization lacks written policies around federal awards for payments, procurement, and allowability of costs charged to federal programs. Cause. Management does not have the proper written policies in place to be in compliance with the Uniform Guidance. Effect. The Organization is exposed to an increased risk of noncompliance due to a lack of established written policies. Questioned Costs. No costs were required to be questioned as a result of this finding, inasmuch as our testing did not reveal any unallowed costs. Recommendation. The Organization should establish written policies that address how payments, procurement, and allowability of costs charged to federal programs are handled for federal awards. View of Responsible Officials. Management agrees with this finding and has prepared a corrective action plan.