Finding Text
SD 2022-005 PERFORMANCE REPORTS US Department of Transportation ? Federal Aviation Administration ALN: 20.106 Airport Improvement Program Contract No. 3-12-0013-023-2021 (for 2021) 3-12-0080-032-2021 (for 2021) Criteria: 2 CFR section 200.303 requires non-federal entities to establish and maintain effective internal controls. The award agreements require performance reporting and quarterly performance reporting (for construction expenditures), to ensure grant funded projects are progressing timely. Condition: Annual reports for award 3-12-0013-023-2021 and quarterly reports for award 3-12-0080-032-2021 were not submitted to the Federal Aviation Authority as required. Cause of condition: After the resignation of both the CEO and the Manager of Finance and Grant Administration in March 2021, the management of Federal awards was assumed by the Deputy Director of Operations on an interim basis. In fiscal year 2022, there was turnover of the project management consultants hired to assist in the grant management process, which was to include the preparation of all required reporting. The Authority did not have adequate controls in place to ensure that required performance reports were being prepared and remitted for review and approval prior to being submitted to the FAA. Questioned costs: None Potential effect of condition: The Authority was not in-compliance with program requirements and award terms for annual quarterly performance reporting. Perspective: New personnel was placed in charge of the grant management process, which included the requirements for performance reporting. There was a lapse in knowledge of the performance reports required to be submitted to the FAA. Recommendation: In the event of changes in key personnel, the person assuming responsibility for a role essential to reporting compliance should consider reaching out to the grantor to ensure that information about the nature and timing of any annual and/or quarterly performance reporting requirements is clarified. The Authority should implement controls to ensure that all required reports are prepared by the project management consultants and reviewed by the Authority prior to being submitted to the FAA on a timely basis. Management?s Response: The Authority acknowledges the audit finding and corrective action is in process. Management is currently working with our project management consultants requesting quarterly reports on active projects for timely filings with the FAA. Once performance reports are received, the reports will be reviewed by management and submitted on a quarterly and/or annual basis.