Finding Text
Finding 2022-004
Internal controls over compliance – Material Weakness
Criteria: The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non- federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Condition: The Organization has not developed a strong system of controls and oversight specifically related to the federal award activity that takes into consideration the control environment, risk assessment, control activities, information and communication and monitoring. This is exemplified by number of deficiencies that follow in this report.
Cause: The year ended December 31, 2022 is the Organization’s first year receiving and expending federal funds in excess of $750,000. Therefore when they received the new funding in 2022, they were unaware of all the additional expectations for oversight that are necessary related to federal funding.
Effect: Due to lack of oversight management and those charged with governance did not identify material errors in the federal activities or risks to the award.
Questioned Costs: Not applicable.
Repeat Finding: Not applicable as the Organization is a first time auditee.
Recommendation: Those charged with governance and management of the organization should evaluate their current internal control processes and levels of oversight as they relate to federal awards and ensure that more robust policies and practices are implemented.
Views of Responsible Official: See Corrective Action Plan.