FAC Explorer

Finding 497528 (2023-001)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-09-20
Audit: 320266
Organization: Oregon Tilth, INC (OR)
Auditor: Kern & Thompson LLC

AI Summary

  • Core Issue: There are significant deficiencies in internal controls over compliance with federal reporting requirements for first-tier subawards over $30,000.
  • Impacted Requirements: The organization failed to report two out of four subawards on time, violating the Federal Funding Accountability and Transparency Act.
  • Recommended Follow-Up: Develop and implement written policies and procedures to ensure timely tracking and reporting of first-tier subawards.

Finding Text

2023-001 Finding – Federal Award Type: Special Reporting – FFATA – Significant Deficiency in Internal Control over Compliance. AL Number: 10.163 Market Protection and Promotion Criteria / Requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The subawards meeting the above definition are to be reported no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition / Context: It was noted during the audit that there were insufficient internal controls over first-tier subawards entered into during 2023 greater than $30,000. Of the 4 subawards tested under the Federal Funding Accountability and Transparency Act Subaward Reporting System, 2 were found to have not been submitted in the required time frame. Cause: Procedures are not in place to ensure that Oregon Tilth is maintaining adequate internal controls over compliance in a timely manner in regard to special reporting. Procedures were not in place to track and report first-tier subawards. Effect: Failure to maintain sufficient internal controls and proper procedures, including tracking over reporting first-tier subawards may result in wrongful use of federal funds and non-compliance with federal awards. Questioned Costs: None. Recommendation: The Organization should establish written policies and procedures regarding first-tier subawards including tracking and proper internal control procedures. Management’s Response: 25 09/12/2024 DRAFT

Corrective Action Plan

Oregon Tilth, Inc. respectfully submits the following corrective action plan for the year ending December 31, 2023. Audit: January 1, 2023 to December 31, 2023. The finding from the schedule of findings is discussed below. The finding is numbered with the number assigned in the schedule. FINDING - FEDERAL AWARD PROGRAMS AUDITS U.S. Department Agriculture 2023-001 Market Protection and Promotion – Assistance Lising #10.163 Recommendation: The Organization should establish written policies and procedures regarding first-tier subawards including tracking and proper internal control procedures. Explanation of disagreement with audit findings: there is no disagreement with the audit findings. Action taken in response to finding: The issue with late Federal Funding Accountability and Transparency Act Subaward Reporting was identified by the auditors during the testing and review of documents during our first Single Audit. Management understood the importance of Immediate action and steps were taken to create and implement appropriate procedures, policies and controls. Action Plan: In order to prevent further tardiness with the submission of the obligated sub-recipient funding, a recurring Asana task item was created that reminds the Grant Finance Manager to submit the report 10 days before the end of the month following the obligation of funds. In addition, the Finance & Administration Director has also created a calendar task and reminder to be the stop gap check, and to approve the pdf of submitted reports before the close of the month. An addendum to the Fiscal Policies and Controls guide was sent to the board Finance Committee on Sept. 9th, 2024 that immediately implements the policy and details the oversight procedure for the submission and approval of reports. The sub-recipient FSRS FFATA excel worksheet schedule has been enhanced to include a page that details the month of the award, number of subrecipients and date the report was filed for that month. There is now a self-reporting column that indicates if the report was filed late. And lastly, the Grants Financial Manager has been ordered to insert written procedures into the Grant Internal Controls guide. Name(s) of the contact people responsible for correction action: Renee Kempka, Finance & Administration Director Abigail Soto, Grants Financial Manager Plan completion date for corrective action plan: September 30, 2024

Categories

Procurement, Suspension & Debarment Subrecipient Monitoring Reporting Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1073970 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.163 Market Protection and Promotion $874,178
10.912 Environmental Quality Incentives Program $49,107
10.311 Beginning Farmer and Rancher Development Program $25,730
10.215 Sustainable Agriculture Research and Education $9,522