Finding Text
Significant Deficiency:2022-003 Recommend continued enhancement/monitoring of established policies and procedures surrounding grant compliance Criteria: Current Uniform Guidance highlights the importance and requirement for grantees to maintain internal control policies and procedures Surrounding the administration of federal grants, focusing clearly on internal controls over compliance with federal requirements for each major program. Condition: As noted in the prior year audit, the District has yet to fully update and review established policies and procedures surrounding risk assessments and grants management associated with the direct administration of federal grants (and others), focusing on clearly defining the key components (i.e., control environment, risk assessment, control activities, information and communication, monitoring). During the current year, we noted the following: Semi-annual time and effort certifications were all completed at the end of the fiscal year same as prior year). We noted a drawdown request associated with the ESSER III funds was performed in January of 2022; however, no expenditures were charged to the funds until August of the subsequent year (fiscal year 2023). We noted the documentation related to quotes obtained under District and state procurement guidelines were unclear/incomplete. See also the Financial Statement Finding 2022-001 reported in accordance with Government Auditing Standards. In our opinion this deficiency could have an impact upon the District’s major federal programs. Repeat Finding: This is a repeat finding from the prior year. Cause: Based upon our discussion with District personnel, due in part to the pandemic, turnover in certain key positions (District accountant) and other personnel changes, the District has fallen behind in the overall close-out and timely reconciliation of financial activity. Additionally, it was indicated additional complexities associated with ever changing operating and regulatory environment of the District combined with staffing turnover increased delays in overall completion of work. A review of the current grant manual, policies and procedures has not been updated. Potential Effect: Specific grant compliance requirements may not be complied with. Moreover, errors or fraud may occur which may not be prevented or detected in a timely manner. Auditor’s recommendation: In our profession opinion, as recommend in the previous year, it is important the District evaluate enhancements to address timely updating of established procedures to ensure the District’s compliance with grant and financial reporting requirements. This is additionally important with changes in District personnel. Management and those charged with governance to design and implement internal controls surrounding financial reporting which ensure timely reconciliation, reporting, monitoring of financial activity and grant compliance. Such policies and procedures should include centralized reporting and monitoring of grant requirements and compliance related thereto should be incorporated into established organizational internal control policies and procedures (inclusive of risk assessment). A routine assessment (annually) should be performed in accordance with updated grant and OMB guidance, to ensure the appropriate design and implementation related thereto. See also our recommendation above (2022-001).