Finding Text
Finding 2022-005: Lack of Internal Control And Noncompliance With Activities Allowed or Unallowed; Allowable Costs/Cost Principles; and Period of Performance
Federal Agency: Denali Commission
Pass through agency: None
Federal Programs: Biomass District Heating System
Assistance Listing Number: 90.100
Award Number: 1672-00
Award Period: 2022
Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance
Condition and Context: The City did not maintain adequate documentation that costs and activities were allowed by the program or that the costs were incurred within the period of performance of the award.
Criteria: All recipients of federal funds must comply with 2 CFR 200.303 – Internal Controls and establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal Award. Additionally, 2 CFR Subpart E - Cost Principles establishes requirements that all recipients of Federal funds must follow when expending federal awards.
Cause: Inadequate internal controls over expenditures.
Effect: The City is not in compliance with the terms and conditions of the federal award and Uniform Guidance requirements.
Questioned Costs: No known questioned costs.
Repeat Finding: This is not a repeat finding, but is considered a systemic problem.
Recommendation: The City should implement policies and procedures to ensure all expenditures have adequate supporting documentation, are not a prohibited cost or activity of a program, and are incurred within the award period of availability.
Management Response: Management concurs with this finding. See Corrective Action Plan.