Finding 959049 (2023-001)

Material Weakness
Requirement
B
Questioned Costs
-
Year
2023
Accepted
2024-03-20
Audit: 296187
Organization: Coos County Airport District (OR)

AI Summary

  • Core Issue: The District lacks adequate controls to ensure accurate reporting of federal expenditures for the Airport Improvement Program.
  • Impacted Requirements: Federal expenditures must be reported in the fiscal year they are incurred, which is currently not being met.
  • Recommended Follow-Up: Implement procedures for regular review and reconciliation of expenditures, enhance internal controls, provide staff training, engage with federal agencies, and establish ongoing monitoring processes.

Finding Text

SA2023 - 001 – MATERIAL WEAKNESS FEDERAL PROGRAM: 20.106 Airport Improvement Program SPECIFIC REQUIREMENT: Federal expenditures related to the program should be reported in the fiscal year they are expended. CONDITION: Adequate controls were not in place to ensure the schedule of expenditures of federal awards was accurate at year end. QUESTIONED COST: None noted CONTEXT: This finding is limited to this major program and the context noted in the condition. EFFECT: Without adequate controls or procedures in place to ensure accuracy of the schedule of expenditures of federal awards there exists the risk of material misstatement. CAUSE: The District did not have adequate knowledge for reporting their federal award expenditures for compilation and reporting. RECOMMENDATION: We recommend the District implement procedures to ensure accuracy of the schedule of expenditures of federal awards. VIEWS OF RESPONISBLE OFFICIALS: Though not identified specifically, there is a correlation to staff turnover in key roles during the fiscal year under audit, and this federal award finding. Management oversight is a key component of internal controls. The District believes with appropriate staffing at all levels allows internal controls to function as designed. Beyond that, there are measures under consideration which intend to mitigate this finding for the subsequent fiscal year end audit, such as:  Review and Reconciliation of Reported Expenditures – this process can be conducted on a more frequent basis than only at closed of year end. This will function as an opportunity to for both staff and management to become overly familiar with the transactions as they occur, the procedure for recording, and the preparation of the schedule. Year-end preparation of the Schedule of Expenditures of Federal Awards (SEFA) will then prove more routine and errors will be more readily apparent.  Enhanced Controls and Processes – though the District maintains, reviews and updates the Internal Control Document regularly, there are often opportunities to enhance controls which when operating as designed will detect misstatement. Care will be taken to review processes and ascertain where additional controls can be put in place to create appropriate checks and balances in processes.  Staff Training – it is the intent of the District to ensure those charged with accounting tasks, as well as those charged with review of accounting data and financial statements have the appropriate experience. Assessment may be necessary to determine if opportunities exist for additional training which will ensure appropriate accounting procedures, including financial statement and SEFA preparation are done accurately and within generally accepted accounting practices.  Engagement with Federal Awarding Agencies – opportunities may arise to converse federal awarding agencies about recording and reporting guidelines; as needed, staff may need additional training or guidance to ensure compliance with all guidelines.  Ongoing Monitoring – creating or updating existing monitoring processes and schedules can ensure that review and validation of the accuracy of expenditure reporting remains in continuous compliance with requirements.

Categories

Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 382607 2023-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
20.106 Airport Improvement Program $4.79M