Finding Text
FINDING 2022-001 - RISK ASSESSMENT PROCESS RELATED TO COMPLIANCE REQUIREMENTS (Repeat Finding of 2021-001) Material Weakness Federal Programs: Charter Schools ? AL 84.282; Education Stabilization Fund ? AL 84.425 Criteria 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Organization must, among other things, ?establish and maintain effective internal control over the Federal award that provides 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. These internal controls should be in compliance with guidance in ?Standards for Internal control in the Federal Government? issued by the Comptroller General of the Unites States of the ?Internal control Integrated Framework:, issued by the Committee of Sponsoring Organization of the Treadway Commission (COSO)?. Condition The Organization has not established a formal process related to federal awards to identify all key compliance requirements and changes in compliance requirements, evaluate risks of noncompliance with these requirements, and respond to such risks of noncompliance through establishing or changing processes and internal controls. The Organization also implements the use of federal funds through different departments. Certain individuals, within a department, responsible for the use of federal funds or maintenance and safeguard of assets acquired with federal funds lacked knowledge of the compliance requirements pertaining to the use of the funds or the maintenance and safeguard of the acquired assets. Cause and Effect The material weakness resulted in the noncompliance findings described in items 2022-002 and 2022-003. Recommendation We recommend additional resources be allocated to federal award compliance to review federal award provisions and requirements, evaluate risks of noncompliance, and respond to such risks through internal controls. The process should include methods to identify and communicate changes to federal award requirements to all key individuals within the Organization and to verify internal controls are implemented correctly and are operating effectively. Views of Responsible Officials and Planned Corrective Actions The Organization?s Corrective Action Plan is included on pages 38 and 39.