Finding Text
2024-003 Document Policies and Procedures over Federal Awards (Significant Deficiency)
Cluster/Program: All Federal Programs
Type of Finding:
Compliance – Other Matters
Internal Control over Compliance – Significant Deficiency
Criteria or Specific Requirement: OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) established significant requirements related to Federal awards. The requirements stipulate that federal award recipients must document their policies and procedures over certain aspects of financial program management. Specifically, written policies are required for the following:
• Determination of allowable costs
• Conflict of interest
• Employee travel
• Cash Management
• Equipment and inventory
• Procurement and Suspension and Debarment
• Time and effort reporting; and
• Subrecipient monitoring and management.
Federal regulations 2 CFR 200.303 states, the Town, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition: The Town has not formalized written policies and procedures related to Federal awards as required under Uniform Guidance.
Cause: Weaknesses in the formal documentation of internal controls.
Effect: There are no formal policies related to federal grant activity noted above.
Questioned Costs: There are no questioned costs because of this finding as there are no costs directly associated with this compliance requirement.
Identification as Repeat Finding: This is not a repeat finding.
Recommendation: The Town should ensure that written policies and procedures are compiled and adopted as soon as practicable to ensure compliance with the Uniform Guidance.
Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.