FAC Explorer

Finding 512839 (2024-002)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2024-12-03
Audit: 330594
Organization: Rural Minnesota Cep, Inc. (MN)
Auditor: Bergankdv LTD

AI Summary

  • Core Issue: Financial reports were submitted without an independent review process, risking inaccuracies.
  • Impacted Requirements: Compliance with internal controls over financial reporting is not being met, potentially leading to material misstatements.
  • Recommended Follow-Up: Establish a formal policy for independent reviews of financial reports, including a checklist and qualified reviewer sign-off.

Finding Text

Assistance listing number(s): 17.258, 17.259, and 17.278 Federal Program Name or Cluster: WIOA Cluster Name of Federal Agency: United States Department of Labor Name of Pass-Through Entity: Minnesota DEED Compliance Requirement/Internal Control over Compliance: Reporting Criteria Organizations are required to maintain effective internal controls over financial reporting to ensure that financial statements and other reports are accurate, complete, and submitted in compliance with applicable regulations. An independent review process is a key internal control to detect and correct errors prior to submission. Condition/Context We noted that financial reports submitted during the year were not subject to an independent review process before submission. Cause The Organization has not implemented a formal policy or procedure requiring an independent review of financial reports prior to submission. Effect Failure to perform an independent review increases the risk of material misstatements in financial reports, noncompliance with reporting requirements, and reduced stakeholder confidence in the reliability of the Organization’s financial information. Questioned Costs No questioned costs were identified. Recommendation We recommend that management implement a formal policy requiring all financial reports to undergo an independent review prior to submission. This process should include a documented review checklist and sign-off by a qualified individual who is independent of the report preparation process. Management’s Response Management agrees with the finding and will implement procedures to ensure independent reviews of financial reports are conducted before submission. The Organization will designate a responsible reviewer and implement a review checklist immediately.

Corrective Action Plan

CORRECTIVE ACTION PLAN Independent Review of Federal Reports Submitted Rural Minnesota CEP, Inc. respectfully submits the following corrective action plan for the year ended 6/30/2024. BerganKDV, LTD. St. Cloud, Minnesota Audit Period: 7/1/2023 – 6/30/2024 The findings from the year ending June 30, 2024, schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Federal Award Finding 2024-002 Independent Review of Federal Reports Submitted Recommendation: That management implement a formal policy requiring all financial reports to undergo an independent review prior to submission. This process should include a documented review checklist and sign-off by a qualified individual who is independent of the report preparation process. Action Taken: We concur with the recommendation, and it was implemented immediately 11/21/2024. The Accounting Manager will send financial reports to a responsible reviewer before submission. Upon approval from the responsible reviewer, a newly implemented checklist will be kept by the Accounting Manager documenting approval.

Categories

Subrecipient Monitoring Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 512840 2024-002
    Significant Deficiency
  • 512841 2024-002
    Significant Deficiency
  • 512842 2024-002
    Significant Deficiency
  • 512843 2024-002
    Significant Deficiency
  • 512844 2024-002
    Significant Deficiency
  • 512845 2024-002
    Significant Deficiency
  • 512846 2024-002
    Significant Deficiency
  • 512847 2024-002
    Significant Deficiency
  • 512848 2024-002
    Significant Deficiency
  • 1089281 2024-002
    Significant Deficiency
  • 1089282 2024-002
    Significant Deficiency
  • 1089283 2024-002
    Significant Deficiency
  • 1089284 2024-002
    Significant Deficiency
  • 1089285 2024-002
    Significant Deficiency
  • 1089286 2024-002
    Significant Deficiency
  • 1089287 2024-002
    Significant Deficiency
  • 1089288 2024-002
    Significant Deficiency
  • 1089289 2024-002
    Significant Deficiency
  • 1089290 2024-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
17.259 Wioa Youth Activities $1.11M
17.235 Senior Community Service Employment Program $137,914
17.278 Wioa Dislocated Worker Formula Grants $57,426
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $17,068
17.258 Wioa Adult Program $16,580
93.558 Temporary Assistance for Needy Families $12,482