Finding 46685 (2022-003)

2022-003 United States Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grant Cluster Preparation of Schedule of Expenditures and Federal Awards Material Weakness in Internal Control Over Compliance - Other Criteria ? Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule). Condition ? The Health Center does not have an internal control system designed to provide for a complete and accurate Schedule being audited. We were requested to draft the Schedule. Cause ? Auditor assistance with the preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required when the Health Center meets a specified threshold of federal expenditures. Effect ? There is a reasonable possibility that the Health Center would not be able to prepare the Schedule without the assistance of the auditors. Questioned Costs ? None reported. Context/Sampling ? Sampling was not used. Repeat Finding from Prior Years ? No. Recommendation ? We recommend that management continue reviewing the internal financial reporting process to enable staff to draft as much of the Schedule as possible. It is the responsibility of management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Views of Responsible Officials ? Management agrees with the finding.