Finding Text
2024-002 Policies Regarding Internal Controls Over Federal Awards (Significant Deficiency in Internal Controls over Compliance and Noncompliance —All Awards)
Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303(a) The recipient and subrecipient of federal awards must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition and Context: The Agency historically updated their documentation of internal controls in conjunction with the annual audit. However, the Agency was unable to provide internally produced written policies regarding the internal controls over state and federal awards.
Cause: A misunderstanding of the requirements to maintain written policies over federal awards.
Effect: The Agency is not in compliance with requirements for recipients and subrecipients of federal awards per 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303. Accounting department staff lack clearly documented guidance for implementing internal controls over federal awards.
Questioned Costs: None
Recommendations: Management should familiarize themselves with the requirements of 2 CFR 200 regarding the specific written policies required to be maintained for recipients and subrecipients of federal awards. Management should develop and maintain internally produced written policies regarding the internal controls over federal awards as described in 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303. Written policies over internal controls over federal awards developed by management should be approved by the Board of Directors or designated committee. Written policies should be made available to accounting department staff involved in the accounting procedures related to federal award expenditures.
Views of Responsible Officials and Planned Corrective Actions: Management is committed to compliance in accordance with all grant agreements and will work to formally document the Agency’s internal controls over Federal and State awards. Additional training will be provided as needed to prevent future findings.