Finding 522002 (2024-003)

2024-003 - Reporting Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance (Reporting). Federal program(s) U.S. Department of Treasury -  COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) (ALN 21.027); Passed through Michigan Strategic Fund and Southwest Michigan First Corporation; All project numbers. Criteria. Recipients of federal awards are required to report periodically on financial information, as specified by the 2 CFR 200 Compliance Supplement or grant agreement. Reported information should be supported by the entity’s accounting records and subjected to an independent review and approval prior to submission in order to detect and correct any errors or omissions. Condition. During our audit procedures over the Organization's reporting process, we noted that none of the quarterly reports selected for testing included documentation that they were subjected to an independent review and approval prior to submission in order to detect and correct potential errors or omissions. Cause. This condition is the result of management not recognizing the importance of establishing such controls. Effect. As a result of this condition, the Organization did not comply fully with the reporting requirements under this federal award. In addition, the Organization was exposed to an increased risk that the reports filed could contain errors and not be detected and corrected on a timely basis. Questioned Costs. No costs have been questioned as a result of this finding inasmuch as no unallowable costs were identified. Recommendation. We recommend that the Organization establish procedures to ensure that all reports are subject to review and approval by an independent employee prior to submission, and that the review and approval is adequately documented. View of Responsible Officials. Management is in agreement and has prepared a Corrective Action Plan.