Finding Text
Finding 2024-005: MATERIAL WEAKNESS—Uniform Guidance Written Internal Control Procedures
Type of Finding: Control
U.S. Department of Justice
Pass-through Entity: Michigan Department of Health and Human Services
Assistance Listing Number: 16.575
Award Numbers: E20243445-00, E20243384-00, E20243038-00
Award Year End: September 30, 2024
Specific Requirements: All twelve areas of compliance
Criteria: Section 200.303 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a non-federal entity to establish and maintain effective internal control over the federal award that provides a 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. The required internal control procedures should address the five components of internal control for each of the applicable twelve areas of compliance for each federal award maintained by the non-federal entity.
Questioned Costs: None.
Condition: The Organization does not have written internal control procedure memos for any of its federal programs.
Context: During our audit of the Crime Victim Assistance program, it was noted that the Organization does not have written internal control procedure memos as mandated by the Uniform Guidance that cover the required five components of internal control for each area of compliance. The sample was not a statistically valid sample, and the matter appears to be a systemic condition.
Effect: Essential internal control steps may be lacking for federal programs without the adoption of written internal control procedure memos, potentially resulting in issues of noncompliance.
Cause: The Organization was unaware of the requirement to establish and maintain written procedure memos for each of its federal program.
Repeat Finding: A similar finding was reported during the single audit for the year ended September 30, 2023.
Recommendation: The Organization should establish and maintain written internal control procedures that cover the required five components of internal control for each area of compliance for each of its federal programs. The Organization should educate all employees working with federal programs of the Organization’s procedures and monitor compliance with them.
Views of Responsible Officials: The Organization agrees with this finding.