Finding Text
Finding 2022-003 Close-out Reporting Type of Finding: Material Weakness in reporting Condition and Context: An effective internal control system was not in place at the Organization to ensure compliance with requirements related to the grant agreement and post-award requirements for closeout and the reporting compliance requirement. Criteria: The grant recipient agrees that the final report shall be submitted no later than 60 days following the end of the award period. Failure to provide this report may result in the deobligation of grant funds and the project to be closed at the discretion of the government. Cause: The Organization had not established an effective system of internal controls that would have ensured compliance with the grant agreement and the reporting compliance requirement. Effect: The failure to establish an internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the reporting compliance requirement 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 a system of internal controls and maintain adequate supporting documentation to ensure compliance with the grant agreement and the reporting compliance requirement. Views of Responsible Officials: Management agrees with the recommendation and has implemented the following steps. General status updates of all federal contracts have been submitted to and accepted by the grantor on a regular basis. However, the Organization overlooked the specific reporting requirements of the federal contract that was completed during the year under audit. To address this issue, the Organization has implemented a checklist of requirements for each federal contract that includes documenting all reporting requirements under the contract and with a step that includes calendaring the reports to ensure deadlines are not missed.