Finding 496936 (2023-004)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-09-16

AI Summary

  • Core Issue: There is a significant deficiency in internal controls for financial reporting and compliance due to oral approvals for expenses instead of documented ones.
  • Impacted Requirements: The Accounting Policies and Procedures Manual mandates written approval from the Executive Director for expenses and payroll items.
  • Recommended Follow-Up: Implement a system for documenting all authorizations and reviews as required by the manual to prevent potential misstatements.

Finding Text

Finding Type: Significant Deficiency in internal control over financial reporting and Significant Deficiency in internal control over compliance. Criteria and Condition: The Accounting Policies and Procedures Manual includes requirements for written approval by the Executive Director for expenses and items related to payroll. During our testing, it was determined these approvals were being given orally and not documented. Cause: Internal controls are not designed to provide authorization of transactions. When these authorizatiions are not documented, it is not possible to know if the transactions were properly authorized. Effect: Misstatements and improprieties could occur and not be detected. Recommendation: We suggest the Organiation provide written documentation of authorizations and reviews as outlined in the Accounting Policies and Procedures Manual. Views of Responsible Officials and Planned Corrective Actions: We will begin providing written documentation of authorizations and reviews as outlined in the Accounting Policies and Procedures Manual.

Corrective Action Plan

View of Responsible Officials and Planned Corrective Actions: We will begin providing written documentation of authorizations and reviews as outlined in the Accounting Policies and Procedures Manual.

Categories

Reporting Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 496935 2023-002
    Material Weakness
  • 1073377 2023-002
    Material Weakness
  • 1073378 2023-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.182 Local Food Purchase Assistance $466,957
10.443 Outreach and Assistance for Socially Disadvantaged and Veteran Farmers and Ranchers $213,191
10.311 Beginning Farmer and Rancher Development Program $85,164
10.170 Specialty Crop Block Grant Program - Farm Bill $33,250
10.912 Environmental Quality Incentives Program $26,707
10.328 National Food Safety Training, Education, Extension, Outreach, and Technical Assistance Competitive Grants Program $3,987