Finding 500405 (2023-003)

Finding 2023-003 Information on the federal program: Subject: Water and Waste Disposal Systems for Rural Communities – Reporting Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listing Number: 10.760 Federal Award Numbers and Years (or Other Identifying Numbers): 2023 Compliance Requirement: Reporting Audit Findings: Significant Deficiency Criteria: 2 CFR section 200.328 states Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. The Federal awarding agency must use OMB-approved common information collections, as applicable, when providing financial and performance reporting information. Condition: The Town did not prepare or submit the required report for the grant. Cause: The Town has not developed and implemented controls over grant reporting. Effect: The Town could fail to submit required reporting to funding agency. Questioned Costs: There were no questioned costs identified. Context: The grant requires a single report, Form RD 442-3 Balance Sheet (OMB No. 0575-0015) to be filed annually. Through inquiries with management, it was determined that the Town did not prepare and review the required report. Management noted a third party came to the Town to run systems reports with the information required for the report, prepared and submitted the report on behalf of the Town. The Town did not perform a review of the report before submission by the third party. Identification as a repeat finding: No. Recommendation: We recommend that management of the Town establish a proper system of internal controls and develop and implement reporting policies and procedures that ensure timely preparation and submission of required federal reports. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.