Finding Text
Finding 2022-001 Internal Control Over Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance Condition and Context: An effective internal control system was not in place at the Organization to ensure compliance with requirements related to reviewing the debarment and suspension status of subrecipients before issuing subawards of federal funds. Criteria: Management is responsible for establishing internal controls to prevent making subawards to any party which is debarred, suspended, otherwise excluded from, or ineligible for participation in Federal assistance programs by any Federal department or agency. Cause: The Organization had not established an effective system of internal controls that would have ensured compliance with the grant agreement and the requirement to review federal debarment or suspended status for all subrecipients. Effect: The failure to establish an internal control system could enable noncompliance to go undetected. Noncompliance with the grant agreement leading to subawards made to debarred entities could have resulted in the loss of federal funds to the Organization. Questioned Costs: There were no questioned costs identified. Recommendation: We recommended that the Organization's management establish and implement a system of internal controls and maintain adequate supporting documentation to ensure all subrecipients are reviewed for federal debarment and suspension status before granting subawards. Views of Responsible Officials: During the year ended December 31, 2022, management began reviewing the debarment and suspension of sub recipients prior to the disbursement of funds expected to be reimbursed by federal funds. The Organization will also institute a new policy requiring all future contracts with sub recipients to include a certification from the sub recipient organization stating the sub recipient organization and its senior members of management have not been notified of suspension or debarment from receiving federal funds.