Finding Text
Finding 2022-004: Writing internal control policies and procedures
Criteria: As stated in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), § 200.303 Internal controls,
“the non-Federal entity must: (a) 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 United
States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards.”
Condition: At the initial phase of the audit procedures for the year ended December 31, 2022, YMCA management has not readily available the written internal control procedures and policies.
Cause: The YMCA has not readily available the written internal control procedures and policies that summaries the monitoring and supervision of the compliance of the internal controls over the Federal awards in compliance
with Federal statutes, regulations, and the terms and conditions of the Federal awards.
Effect or Potential Effect: Failure to meet the requirement of written internal control and procedures could be considered by the grantor and the pass-through entity as a noncompliance with the above-mentioned criteria and
could lead to administrative sanctions.
Recommendation: We recommend YMCA's management to expand written evidence over its internal control procedures in order to provide adequate evidence to ascertain that the procedures are performed as required.