FAC Explorer

Finding 572136 (2024-001)

Significant Deficiency
Requirement
G
Questioned Costs
-
Year
2024
Accepted
2025-07-29
Audit: 363266
Organization: Washington Independent Telecommunications Association (WA)
Auditor: Baker Tilly US LLP

AI Summary

  • Core Issue: A significant deficiency in internal controls led to a reimbursement request that incorrectly included a 10% matching contribution, violating grant terms.
  • Impacted Requirements: Compliance with 2 CFR § 200.306 regarding matching contributions was not met, risking potential questioned costs.
  • Recommended Follow-Up: Implement procedures to ensure proper exclusion of matching expenditures and provide additional training on grant management to strengthen internal controls.

Finding Text

FINDING 2024‐001 – Matching, Level of Effort, Earmarking; Significant Deficiency in Internal Control over Compliance U.S. Department of the Treasury Assistance Listing Numbers: 21.027 Federal Program Names: Coronavirus State and Local Fiscal Recovery Funds Program Award Year: Fiscal Year 2022 Criteria: Per 2 CFR § 200.306, the non-federal entity must provide required matching contributions in accordance with the terms and conditions of the federal award. Contributions must be verifiable from the recipient’s records, not be included as contributions for any other federal award, be necessary, and reasonable. Condition and context: During our testing of matching, level of effort, and earmarking, one reimbursement request included all expenditures for reimbursement on the A-19, though the 10% match should have been excluded in accordance with the grant agreement. This was caught by the State of Washington Department of Commerce and subsequently corrected prior to disbursement of the reimbursement request. This was the only instance of noncompliance noted within the sample of 28, of which 25 were randomly selected and 3 were supplemented as they were material to the program. Questioned costs: None. Effect: Without internal controls that are designed and implemented appropriately, an error could occur and result in questioned costs or the need to repay a portion of the federal award. Cause: This was very early in the process of managing federal funding for the Association. Internal controls were not adequate to catch the error, which occurred because of a lack of experience relating to grant management within the Association. Repeat finding: No. Recommendation: We recommend that management implement procedures to ensure the matching expenditures are appropriately excluded from the reimbursement requests prior to submission, and in compliance with 2 CFR § 200.306 prior to being reported. Additional training could benefit the Association’s understanding of grant management and improve internal control processes as a result. Views of responsible officials and planned corrective actions: Management has implemented a formalized checklist for preparing reimbursement requests, which includes a step to verify exclusion of the 10% match. Manual calculations are performed on each match submittal form to verify the requested amount excludes the 10% match. All reimbursement requests are now subject to a dual review and approval process before submission to the granting agency. This was implemented March 2024. Contacts: Betty Buckley, Executive Director Maranda Davis, Grant Management Assistant

Corrective Action Plan

Audit Finding The audit found that during the reimbursement request process, WITA included total expenditures on the A-19 form without excluding the 10% required match, as outlined in the grant agreement and under 2 CFR § 200.306. The error was identified by the Washington State Department of Commerce and corrected before the reimbursement was issued. This was the sole instance of noncompliance identified within the 28 sampled requests. Cause of the Finding This error occurred early in WITA’s management of federal funds, during a period when the Association was still building internal knowledge and procedures for federal grant compliance. At the time, WITA unknowingly lacked fully developed internal controls specific to federal match reporting, and the staff involved had limited experience with federal grant administration. Corrective Actions and New Controls Implemented To address this issue and strengthen internal compliance, WITA has implemented the following controls: • Grant Management Procedures: A formalized checklist has been created for preparing reimbursement requests, which includes a step to verify exclusion of the 10% match. Manual calculations are performed on each Match Submittal Form to verify the requested amount excludes the 10% match. • Dual Review Process: All reimbursement requests are now subject to a dual review and approval process before submission to the granting agency. Responsible Party for Monitoring Compliance The Grant Management Assistant, Maranda Davis, is responsible for overseeing compliance with federal grant requirements and ensuring all reimbursement requests meet applicable match exclusion rules. Ongoing oversight is provided by the Executive Director. Timeline of Implementation • February 2024: Error identified and corrected in partnership with the Department of Commerce • March 2024: Grant reimbursement checklist developed and implemented • Ongoing: Dual reviews of requests initiated WITA is committed to ensuring strict compliance with federal grant requirements and continuously improving our internal controls. We appreciate your attention to this matter and the opportunity to strengthen our grant management practices. Sincerely, Betty Buckley Executive Director, Washington Independent Telecommunications Association

Categories

Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 1148578 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $3.08M