Finding 43154 (2022-001)

Material Weakness
Requirement
C
Questioned Costs
$1
Year
2022
Accepted
2023-03-07

AI Summary

  • Core Issue: There are inadequate internal controls over cash management, leading to a shortfall of $29,934 between unearned revenues and cash balances.
  • Impacted Requirements: Compliance with 2 CFR Section 200.305, which mandates that advanced cash payments be used only for applicable grant programs.
  • Recommended Follow-Up: Implement stronger internal controls and policies to better manage the timing of cash outflows and reimbursements from granting agencies.

Finding Text

Finding 2022-001 Lack of Internal Controls over Cash Management Federal Agency: U.S. Department of the Interior Federal Programs: Tribal Management Subsistence Assistance Listing Numbers: 15.036 Award Numbers: A21AV01012, A20AV01058 Award Years: 2021, 2020, respectively Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: The requirements for cash management contained in 2 CFR Section 200.305 state advanced cash payments must be used only for applicable grant programs. Condition and Context: Procedures related to cash management were inadequate to ensure that grant funds drawn down were used for grant expenditures in the program, which received the program advances. We compared the unearned revenue balances of the grant funds with the available cash balances at year end. AITRC?s cash balances amounted to $683,313 at September 30, 2022. The unearned revenues were $713,247, which resulted in a shortfall of $29,934. The Tribal Management Subsistence Program had unearned revenues of $543,071 at September 30, 2022. Cause: Inadequate internal controls over the use of restricted program funds. The shortfall also results from the timing difference from when AITRC pays for expenditures and receives reimbursement from granting agencies. Effect: Unearned revenue balances exceeded cash balances at year end. Questioned Costs: $29,934, which is the difference between deferred revenue and cash balances as of September 30, 2022. Repeat Finding: This is believed to be an isolated incident as this is not a repeat finding. Recommendation: Management should implement internal controls and policies to limit the timing between cash outflows and reimbursement from granting agencies. Management Response: Management agrees with this finding, see Corrective Action Plan.

Corrective Action Plan

Finding 2022-001 Lack of Internal Controls over Cash Management Name of Contact Person: Karen Linnell, Executive Director Tamara Hamby, Accountant Corrective Action Plan: Account and grant receivables will be tracked and collected within 30 days of the closing of the quarter. We will be aggressive in collecting past due receivables. We will continue to follow the specific grant guidelines on drawing down funds. Proposed Completion Date: December 1, 2022

Categories

Questioned Costs Cash Management Material Weakness

Other Findings in this Audit

  • 619596 2022-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
15.036 Tribal Management Subsistence $647,556
93.612 Ahtna Cultural Preservation Capacity-Building Project $73,341
90.100 Boardband Consortium Program $48,393
10.902 Indigenous Sentinels Network $48,157
66.926 Ahtna Indian General Assistance Program (igap) $28,498
10.932 Copper Basin Subsistence Landscape Resiliency $9,345
15.946 Ahtna Ethnographic Overview and Assessment $8,820
15.944 Natural Resource Stewardship Caribou Study $8,576
15.643 Alaska Migratory Bird CO-Management Council $3,538