Finding 517150 (2018-001)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2018
Accepted
2024-12-30
Audit: 335089
Auditor: One River CPAS

AI Summary

  • Core Issue: The audit was completed 15 months late, violating federal requirements and loan agreement deadlines.
  • Impacted Requirements: Noncompliance with 2 CFR 200.512(a)(1) and the USDA loan agreement, risking immediate repayment of funds.
  • Recommended Follow-Up: Management should plan audits before year-end and assign staff responsibilities to ensure timely completion.

Finding Text

Finding 2018-001 - Timely Completion of Audit under Uniform Guidance, Loan Agreement, and Submission to Federal Audit Clearinghouse (Noncompliance and Material Weakness in Internal Controls over Compliance – Federal Program CFDA 10.766/10.780 Community Facilities Loans and Grants Cluster) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.512 (a)(1) states that the auditee must complete and submit the single audit report (including financial statements and the schedule of expenditures of federal awards) within nine months of the organization’s year-end. In addition, a Workout Agreement with USDA Rural Development required completion of the single audit by November 15, 2020 to comply with its original community program loan agreement with USDA. Condition and Context: The auditors were not engaged until December 2020, fifteen months after the due date. Shortly thereafter, the previous audit firm merged with the current audit firm, and due to COVID-19, staffing and scheduling issues, and delays in responding to audit requests, the completion of the audit was delayed significantly. Cause: Lack of planning for the audit to begin prior to the December 31, 2018 year end. Effect: The audit was completed well beyond the due date of September 30, 2019. Although it has not occurred as of this report date, the Government has the right to declare the entire balance immediately due and payable. Questioned Costs: None Recommendation: Management should determine prior to each year-end if an audit is required based upon that years’ grant funding and begin planning prior to year-end. In addition, responsibilities should be assigned to staff for timely completion of audit work and requested information. Views of Responsible Officials and Planned Corrective Actions: The 2023 staffing plan includes the addition of a controller and financial analyst. Initially we anticipate this controller to be a half time position growing to full time within 12-15 months. The analyst position will likely be a 2024 hire. These positions would be responsible for implementing the recommendation. We have created a job description for the controller and posted the position in early 2023. We did not find a suitable candidate and will repost.

Corrective Action Plan

The 2023 staffing plan included the addition of a controller. Initially we anticipate this controller to be a half-time position growing to full-time within 12-15 months. The position would be responsible for implementing the recommendation. We have created a job description for the controller and posted the position in 2023. In 2024 we have interviewed a suitable candidate and have submitted an offer for employment which was accepted effective April 8, 2024. It will take the controller 90 days to get up to speed on all aspects of the position. The anticipated completion date for this corrective action is July 31, 2024.

Categories

Allowable Costs / Cost Principles Material Weakness Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 517151 2018-002
    Material Weakness
  • 517152 2018-003
    Material Weakness
  • 1093592 2018-001
    Material Weakness
  • 1093593 2018-002
    Material Weakness
  • 1093594 2018-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.766 Community Facilities Loans and Grants $1.65M
10.855 Distance Learning and Telemedicine Loans and Grants $40,696