Finding 576634 (2022-003)

Federal Agency: U.S. Department of the Treasury Federal Programs: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award Numbers: SLFRP3168/5205 Award Years: 2021 Type of Finding: Material weakness in internal control over compliance and material noncompliance Criteria: In accordance with 2 CFR Section 200.305, advanced federal funds held in depository institutions must be deposited and maintained in insured accounts. Condition and Context: Internal control procedures related to monitoring insured cash balances were inadequate. The Council had advanced federal funds (deferred revenue) of $10,512,764 as of September 30, 2022. Uninsured and uncollateralized cash balances were $9,328,634 as of September 30, 2022. Cause: Lack of internal controls over the monitoring of insured cash balances. Effect: Failure to follow granting agency requirements could result in loss of federal funding or at a minimum, the Council having to repay portions of the advanced federal funds. Questioned Costs: None. Repeat Finding: This is a repeat of Finding 2021-001, and since this is a repeat finding we believe it to be a systemic issue. Recommendation: We recommend that management that the Council establish policies and controls over special tests and provisions related to monitoring advanced funds to ensure federal funds are properly held in fully insured depository accounts. Management’s Response: Management concurs with this finding. See corrective action plan.