Finding Text
2022-004 Significant Deficiency in Compliance ? Special Tests ? Collateralization, repeat of 2022-002 Identification of federal programs: 21.027 Coronavirus State and Local Fiscal Recover Funds 2022-002 Collateralization ? Significant Deficiency in Compliance and Internal Controls over Compliance ? Special Tests Criteria: 2 CFR part 200 subpart -D section 200.305(b)(7)(ii) states that ?Advance payments of Federal funds must be deposited and maintained in insured accounts whenever possible.? Condition: The accounts at the banking institution were not collateralized. Cause: Klawock Cooperative Association has changed banking institution and has not set up the collateralization at the new bank. Effect or potential effect: The Association was not in compliance with Federal compliance requirements. Additionally, if the bank fails, federal funds would be put at risk. Recommendation: Klawock Cooperative should immediately have the bank provide collateralization. Views of Responsible Officials: Management agrees. See Corrective Action Plan