Finding 404118 (2023-003)

Internal Controls Over Cash Management and Reporting Federal Program Information Federal Agency: U.S. Department of Labor, U.S. Department of Veterans Affairs Cluster/Program: Homeless Veterans’ Reintegration Program; VA Supportive Services for Veteran Families Program; Staff Sergeant Parker Gordon Fox Suicide Prevent Grant Program AL Number: 17.805, 64.033, 64.055 Award Year: 2020 - 2023 Compliance Requirement: Cash Management, Reporting Type of Finding Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement When entities are funded on a reimbursement basis, program costs must be incurred by entity funds before reimbursement is requested from the federal government. In addition, grantees must provide reasonable assurance that required reports for federal awards include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. Management of the Organization is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context Samples of reimbursement requests and required quarterly financial and performance reports were obtained in order to determine internal control over and compliance with federal cash management and reporting requirements. As a result of testing, there was no documented evidence that someone other than the preparer was involved in the reimbursement request and reporting process. Cause No formal documentation of internal controls was evident. Effect or Potential Effect Due to the items noted above, there is a risk that amounts requested for reimbursement and reported on quarterly financial and performance reports are incorrect. Questioned Costs No questioned costs are reported as this requirement relates to procedural requirements, where questioned costs are not quantifiable. Recommendation The Organization should address the weaknesses in internal controls noted above in order to comply with the federal requirements related to internal control over cash management and reporting, and to reduce risk. View of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.