Finding 959952 (2019-007)

Material Weakness Repeat Finding
Requirement
C
Questioned Costs
$1
Year
2019
Accepted
2024-03-21
Audit: 296571
Organization: Akiachak Native Community (AK)

AI Summary

  • Core Issue: There is a significant lack of internal control over cash management, leading to a material weakness in compliance.
  • Impacted Requirements: The Community failed to comply with cash management rules outlined in 2 CFR 200.305, resulting in questioned costs of $1,612,468.
  • Recommended Follow-Up: The Community should closely monitor grant budgets and cash drawdowns to prevent borrowing between programs and manage unearned revenue effectively.

Finding Text

Finding 2019-007 Lack of Internal Control Over Cash Management Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively CFDA Numbers: 15.021 and 93.441, respectively Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD) Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: The requirement for cash management, as contained in 2 CFR 200.305, states advanced cash payments must be used only for applicable grant programs. Condition and Context: Procedures related to cash management were inadequate to ensure that funds drawn down were not used for other grant expenditures. The Community’s cash balances at December 31, 2019 were $48,998 and total unearned revenue was $1,661,466, leading to a cash shortfall of $1,612,468. This resulted from the temporary borrowing of federal funds to pay expenses in the General Fund and other federal award programs. Deferred revenue as of December 31, 2019 in the CTG Program was $91,645 and $885,809 in the ISD Program. Cause: Lack of internal controls over cash management. Effect: The Community was not in compliance with 2 CFR 200.305 related to cash management requirements. Deposits were used to fund other programs of the Community. Questioned costs: $1,612,468, which is the shortfall between cash balances and unearned revenue balances. Repeat finding: This is a repeat of Finding 2018-006; therefore, we believe this to be a systemic issue. Recommendation: We recommend the Community monitor grant budgets and drawdowns throughout the year and ensure that program funds are not being lent or borrowed between programs in an effort to ensure that unearned revenue balances do not exceed total cash. Management Response: Management agrees with this finding, see Corrective Action Plan.

Categories

Questioned Costs Cash Management Material Weakness

Other Findings in this Audit

  • 383508 2019-006
    Material Weakness Repeat
  • 383509 2019-006
    Material Weakness Repeat
  • 383510 2019-007
    Material Weakness Repeat
  • 383511 2019-007
    Material Weakness Repeat
  • 383512 2019-008
    Material Weakness Repeat
  • 383513 2019-008
    Material Weakness Repeat
  • 383514 2019-009
    Material Weakness Repeat
  • 383515 2019-009
    Material Weakness Repeat
  • 959950 2019-006
    Material Weakness Repeat
  • 959951 2019-006
    Material Weakness Repeat
  • 959953 2019-007
    Material Weakness Repeat
  • 959954 2019-008
    Material Weakness Repeat
  • 959955 2019-008
    Material Weakness Repeat
  • 959956 2019-009
    Material Weakness Repeat
  • 959957 2019-009
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.441 Indian Self-Determination $533,216
14.867 Indian Housing Block Grants $437,080
15.021 Consolidated Tribal Government Program $302,962
20.205 Highway Planning and Construction $122,810
66.926 Indian Environmental General Assistance Program (gap) $92,796
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $92,673
15.029 Tribal Courts $84,838
93.575 Child Care and Development Block Grant $63,104
16.710 Public Safety Partnership and Community Policing Grants $61,340
15.033 Road Maintenance_indian Roads $28,241
16.841 Voca Tribal Victim Services Set-Aside Program $26,692
81.087 Renewable Energy Research and Development $17,124