Finding 7497 (2022-002)

Federal Agency: U.S. Department of Agriculture. Federal Program Name: Market Access Program and Agricultural Trade Promotion Program. Assistance Listing Number: 10.601 & 10.618. Federal Award Identification Number and Year: EUSAFEC MAP-2022. Award Period: January 1, 2022 through June 30, 2023. Type of Finding: Significant Deficiency in Internal Control over Compliance. Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires compliance with the provisions of cash disbursements and cash management. The Organization should follow the internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted the Organization did not follow the adequate internal controls designed to ensure valid cash disbursements were approved prior to payment and claims were approved prior to submission. Questioned costs: None. Context: During our testing, it was noted that the Organization was not performing internal control procedures that are documented in its policies and procedures around cash disbursements for approval of payments and around claims submitted that did not have documented approval prior to submission to the federal government. Cause: The Organization was aware of the internal control procedures documented in its policies but did not follow the procedures. There was noted compensating controls around cash disbursements and cash management that were documented in our testing. Effect: The auditors noted no instances of noncompliance with the provisions of cash disbursements or claims submitted; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is not a repeat of a finding in the immediately prior year. Recommendation: We recommend the Organization ensure the completion of the controls within their policies to ensure an adequate review process is in place prior to cash disbursement payments and claims submitted. Views of responsible officials: There is no disagreement with the audit finding.