Finding 525686 (2023-003)

Material Weakness

Requirement

Questioned Costs

Year

2023

Accepted

2025-03-05

Audit: 344799

Organization: Belforest Water Systems, Inc. (AL)

Auditor: Carr Riggs & Ingram LLC

AI Summary

Core Issue: The System failed to submit quarterly financial reports on time and with accurate information for two quarters in 2023.
Impacted Requirements: Compliance with grant criteria requiring reports within 30 days of quarter end is not being met, risking grant cancellation.
Recommended Follow-Up: Management should establish a control system to ensure timely and accurate reporting, with a completion target of February 28, 2025.

Finding Text

2023-003 – Delinquent and Inaccurate Quarterly Reporting to Lenders – Material Weakness in Internal Controls over Compliance/Material Noncompliance ALN and Title: 10.760, Water and Waste Disposal Systems for Rural Communities Award Year: 2018 Criteria – Grant requires submission of quarterly financial reports within 30 days of quarter end. Condition – The System did not submit quarterly reports for 2 quarters in 2023 and submitted 2 quarters after the due date. Additionally, the information that was submitted was not complete and accurate. Cause – There is no control to ensure reports are accurately and timely filed. Effect – The grantor could cancel the grant and any future awards due to lack of compliance. Auditor’s Recommendation – We recommend management implement a control to ensure that reports related to their grant funding are accurately and timely filed. Views of Responsible Officials and Planned Corrective Action – The System agrees with the finding and the Business Manager and the Board of Directors will work together to implement a control that sufficiently addresses the reporting requirements of federal awards and agreements. Responsible Officials – Business Manager, Marinda Turner. Timeline and Estimated Completion Date – February 28, 2025

Corrective Action Plan

2023-003 – Delinquent and Inaccurate Quarterly Reporting to Lenders – Material Weakness in Internal Controls over Compliance/Material Noncompliance Recommendation: Management should implement a control to ensure that reports related to their grant funding are accurately and timely filed. Action Taken: The Business Manager created a monthly checklist that includes a monitoring procedure to verify all reporting necessary under contracts and agreements has been accurately prepared and submitted on time. In addition, due dates of required reports are logged on the calendar of the Business Manager. Responsible Person – Business Manager, Marinda Turner Anticipated Completion Date: February 28, 2025

Other Findings in this Audit

1102128 2023-003

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
10.760	Water and Waste Disposal Systems for Rural Communities	$1.42M