Finding 573540 (2024-005)

2024-005 - Lack of Written Federal Policies and Procedures Required by Uniform Guidance Finding Type: Material weakness in internal control over compliance Federal Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Allowable Costs/Cost Principles, Procurement and Suspension and Debarment Condition/Finding: The Village has not developed or implemented the written policies and procedures required under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Required documentation is absent in areas such as internal controls over compliance, cash management, procurement, and allowable costs. Criteria: Per 2 CFR §200.303 and related sections (including §§200.305 and 200.318–320), non-federal entities expending federal awards must establish and maintain effective internal controls and must document policies and procedures governing compliance with applicable federal statutes, regulations, and terms of award. Cause: The Village has not formally developed Uniform Guidance-compliant policies due to limited administrative resources and competing operational priorities. Effect: The absence of formal written policies and procedures increases the risk of inconsistent or noncompliant treatment of federal expenditures. Without documented controls and expectations, the Village may fail to detect or prevent noncompliance with federal requirements in key grant administration areas. Recommendation: We recommend that the Village adopt written policies and procedures addressing the specific requirements outlined in the Uniform Guidance. These policies should include, but not be limited to, internal controls over compliance, procurement, cash management, subrecipient monitoring (if applicable), and allowable cost determinations. Management should ensure that these policies are communicated and periodically reviewed. View of Responsible Officials: Management’s response and planned corrective action can be found in the accompanying Corrective Action Plan.