Finding Text
2022-002 Internal Controls over Schedule of Expenditures of Federal Awards Preparation (Material Weakness) Federal Agency: Department of Treasury Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award period: Year ended December 31, 2022 Criteria: According to 2 CFR 200, Subpart F, the Organization is required to prepare a schedule of federal expenditures, which must include the total federal awards expended as determined in accordance with ?200.502. An effective internal control system exists if controls are effective in preventing or detecting material misstatements in the preparation of the schedule of federal expenditures of federal awards (the schedule). It provides reasonable assurance for the reliability of financial information and compliance with laws and regulations. Condition: We have determined that there was an inadequate design of internal control over the preparation of the schedule during the fiscal year ended December 31, 2022. The current financial reporting process does not ensure accuracy and completeness in the preparation of the schedule as required by Uniform Guidance. Cause: The Organization?s policies and procedures were not designed to prepare the schedule in conformity with Uniform Guidance. Effect: The Organization did not prepare the schedule in conformity with Uniform Guidance as material adjustments were made to the expenditures of federal awards. This includes identifying the correct assistance listing number of its federal programs. This increases the likelihood of a material misstatement and noncompliance with laws and regulations. Recommendation: We recommend the Board of Directors and management review the financial reporting process. Once this review is complete, the Organization should then perform a risk assessment to determine the best way to implement appropriate internal controls over financial reporting to ensure conformity with Uniform Guidance. Questioned costs: None Repeat Finding: N/a. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and plans to develop proper written policies and procedures for the internal control over compliance to ensure accuracy and completeness in the preparation of the schedule as required by Uniform Guidance.