Finding 572455 (2024-002)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2025-08-04

AI Summary

  • Core Issue: The District lacks a formal internal review process for quarterly report preparation and submission.
  • Impacted Requirements: This violates 2 CFR §200.328(b)(1) and 2 CFR §200.303, which mandate reliable reporting and compliance with federal guidelines.
  • Recommended Follow-Up: Develop formal policies for report review, assign responsibilities, implement checklists, and provide staff training to ensure accuracy and compliance.

Finding Text

Condition: During our review of the District’s reporting procedures, we noted that the District does not have a documented or formalized internal review process for the preparation and submission of required quarterly reports. Reports are typically prepared and submitted by a single individual without supervisory review or approval. Criteria: In accordance with 2 CFR §200.328(b)(1), non-Federal entities are required to submit performance and/or financial reports on a regular basis as specified in the terms and conditions of the award. Effective internal controls, as outlined in 2 CFR §200.303, require that entities establish and maintain processes to ensure reliable reporting and compliance with federal requirements. Cause: This is the first year the District has been subject to a single audit, exceeding the $750,000 expenditure threshold, and has not yet developed formal policies or procedures for reviewing and approving required financial and programmatic reports. Effect: The absence of a formal review process increases the risk of reporting errors, late submissions, or omissions that could lead to noncompliance with federal reporting requirements. It also reduces the ability to detect and correct potential reporting deficiencies before submission to the federal awarding agency. Recommendation: We recommend that the District develop and implement formal policies and procedures to ensure that federal reports are reviewed for accuracy, completeness, and timeliness prior to submission. Management should assign responsibility for report preparation and review, implement checklists or reconciliation processes, and provide training to staff involved in federal reporting. Views of Responsible Officials: See the attached Corrective Action Plan.

Corrective Action Plan

Recommendation: We recommend that the District develop and implement formal policies and procedures to ensure that federal reports are reviewed for accuracy, completeness, and timeliness prior to submission. Management should assign responsibility for report preparation and review, implement checklists or reconciliation processes, and provide training to staff involved in federal reporting. Corrective Action: 1. Assign separate personnel for report drafting and supervisory review to ensure segregation of duties. 2. Create and require use of a Quarterly Report Review Checklist to confirm accuracy, completeness, and timeliness before submission. Person Responsible for Corrective Action: William Clayton, Finance Manager. Anticipated Completion Date for Corrective Action: Corrective Action is immediately implemented in response to the auditors’ recommendation.

Categories

Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.17M