Finding Text
2024-002 Reporting and grants administration: Criteria: Current Uniform Guidance (and financial reporting) highlights the importance and requirements for grantees to maintain a system of internal controls surrounding the administration of federal grants which ensure all compliance requirements and the financial reporting related thereto are achieved for each federal program. Condition: As also detailed in finding 2024-001 above, the District’s processes did not provide for routine, and timely monitoring and reconciliation of financial activity associated with the grant award. Based upon our audit procedures we noted journal entries were required (inclusive of approximately $208,000) to be made by management as part of the fiscal year 2024 close out and overall monitoring of the grant to adjust activity within the ledger to that being reported in the underlying grant reporting. Cause: The District’s general ledger and underlying grants and associated reporting were not reconciled throughout the fiscal year. Potential Effect: The District’s reporting associated with the program is late. Additionally, the lack of reconciliation and monitoring of the grants with the general ledger allow for material misstatements within the District’s general ledger (financial statements and schedule of expenditures of federal awards) to occur. Misstatements could have an effect upon the decisions made by the users of the financial information. Based upon our procedures and discussion with current personnel, adjusting entries were proposed to correct the identified misclassified. Repeat Finding: This is a repeat finding from the prior year. (2023-002). Auditor’s Recommendation: As recommended in the prior year, the District’s procedures should ensure all financial activity is posted as intended on a timely basis. Established internal control policies and procedures should ensure the routine reconciliation of grant and underlying accounting records, as well as formalized review and documentation of the District’s compliance with grant compliance requirements. Management should update current policies and procedures accordingly. Moreover, management should evaluate review of all grant administration as a part of a routine risk assessment program. Based upon our discussions with current management, additional enhancements are being addressed in fiscal year 2025.