Finding Text
FINDING 2022-003
Information on the federal program:
Subject: Water and Waste Disposal Systems for Rural Communities – Reporting
Federal Agency: U.S. Department of Agriculture
Assistance Listing Number: 10.760
Federal Award Number: 92-02 92-03
Pass-Through Entity: N/A
Compliance Requirements: Reporting
Audit Findings: Significant Deficiency
Criteria: 2 CFR 200.302(b) states in part:
"The financial management system of each non-Federal entity must provide for the following:
(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in
accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ."
34 CFR 76.722 states:
"A State may require a subgrantee to submit reports in a manner and format that assists the State in
complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the
program."
Condition: The City did not have proper controls in place to ensure that the annual report was accurately
filled out and agreed to underlying detail.
Cause: There were not sufficient internal controls in place to ensure the accuracy of the annual report prior
to its submission.
Effect: The failure to establish an effective internal control system placed the City at risk of noncompliance
with the grant agreement and the Reporting compliance requirements.
Questioned Costs: There were no questioned costs identified.
Context: Variances to key line items were noted when comparing the Form RD442-2 and Form RD442-3
to supporting documents.
Identification as a repeat finding, if applicable: No
Recommendation: We recommend someone other than the preparer thoroughly review and document the
review of the report prior to submission to validate the accuracy and completeness of the data submitted.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.