Finding 523963 (2022-002)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2025-02-19
Audit: 343141
Organization: Micronesia Conservation Trust (FM)

AI Summary

  • Core Issue: The Trust failed to file two required FFATA subaward reports for subawards over $30,000.
  • Impacted Requirements: Non-compliance with 2 CFR 170.000 reporting criteria for federal grants.
  • Recommended Follow-Up: Implement internal controls to ensure regular reviews of reporting requirements for subawards.

Finding Text

Finding No.: 2022-002 Federal Agency: U.S. Department of Commerce AL Program: 11.482 Federal Award Nos.: NA22NOS4820155, NA20NOS4820198, NA20NOS4820046 Area: Reporting Questioned Costs: $0 Criteria In accordance with 2 CFR 170.000, recipients of a federal grant are required to file a Federal Funding Accountability and Transparency Act (FFATA) subaward report if the recipient grants any subaward equal to or greater than $30,000 in federal funds. Under reporting requirements, the recipient must report each subaward of this award term to the FFATA Subaward Reporting System (FSRS) at http://www.fsrs.gov. The key data elements to be reported include subawardee name, subawardee Data Universal Numbering System (DUNS) number, amount of subaward, subaward obligation/action date, date of report submission, subaward number, subaward project description, subawardee names and compensation of highly compensated officers. The subaward report should be submitted no later than the end of the month following the month in which the subaward was issued. Condition The Trust is required to file ten (10) reports to the federal grantor for fiscal year 2022. These comprise of four (4) financial reports, four (4) progress narrative reports, and two (2) special reports related to FFATA Subaward Reporting System (FSRS). However, the Trust did not file two (2) of these reports. The Trust has two (2) subaward agreements that exceed the $30,000 federal funds criteria set by FFATA. Cause: The Trust does not have procedures and internal controls in place to determine the special reporting requirements under the FFATA. Recommendation: The Trust should establish internal controls requiring periodic review of the applicable reporting requirements involving subawards. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.

Corrective Action Plan

Views of responsible official and planned corrective actions: The Trust will conduct periodic internal audits to verify that all reports, including FFATA reports, are submitted in compliance with federal regulations. The Trust has instituted a new project review procedure which includes screening FFATA requirement. The Trust's CEO and CFO, who joined the company in 2024, have been actively conducting internal reviews of the financials and ongoing projects. These officials are currently overseeing a course correction to ensure better alignment with the Trust's strategic goals. Contact Person: Executive Team, Mae Bruton-Adams - CEO, Lisa R. Andon - COO Melanie Lawrence Aiseam, CFO Expected Completion Date: February 28, 2025

Categories

Subrecipient Monitoring Internal Control / Segregation of Duties Reporting

Other Findings in this Audit

  • 523960 2022-001
    Significant Deficiency
  • 523961 2022-001
    Significant Deficiency
  • 523962 2022-001
    Significant Deficiency
  • 523964 2022-002
    Material Weakness
  • 523965 2022-002
    Material Weakness
  • 1100402 2022-001
    Significant Deficiency
  • 1100403 2022-001
    Significant Deficiency
  • 1100404 2022-001
    Significant Deficiency
  • 1100405 2022-002
    Material Weakness
  • 1100406 2022-002
    Material Weakness
  • 1100407 2022-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
11.482 Coral Reef Conservation Program $304,668
98.001 Usaid Foreign Assistance for Programs Overseas $26,882
15.875 Economic, Social, and Political Development of the Territories $5,563
10.664 Cooperative Forestry Assistance $3,505