Finding 500400 (2023-002)

Internal Controls over Compliance (Significant Deficiency in Internal Control over Activities Allowed and Allowed Costs) – Department of the Interior – Fish and Wildlife Coordination Act – Assistance Listing No. 15.517; Grant period: Year Ended December 31, 2023. Criteria – All invoices are reviewed by the Executive Director before being included in a Fund Request. The Executive Director prepares a Fund Request memo with supporting invoices and is reviewed and approved by the CFO. Condition – Internal controls were not followed on all fund requests during the year ended December 31, 2023. In particular, control was not followed in first quarter of 2023. Questioned costs – There are no known questioned costs. Though controls were not followed there were no instances of noncompliance noted. Context – Inspection of supporting documentation noted 3 instances where formal approval of the invoices included in a fund request were not formally approved. All 3 instances were in the first quarter of the year ended December 31, 2023. Effect – Expenditures not allowed to be reimbursed by the federal award could be submitted for claim. Cause – There were no formalized controls in place during the first quarter of the year ended December 31, 2023. Repeat finding – First year program has been audited therefore this is not a repeat finding. Recommendation – We recommend management implement a control to ensure fund requests are formally approved prior to submission of the claim. Management's response – Management established formalized internal controls in the second quarter of 2023, approved by the Board of Directors, with all fund requests approved by the Executive Director and the CFO.