Finding Text
2023 – 001
Federal Agency: U.S. Department of Agriculture
Federal Program Name: Rural eConnectivity Pilot Program
Assistance Listing Number: 10.752
Federal Award Identification Number and Year: MD 1701-A64, 2020
Award Period: July 1, 2020 – July 1, 2025
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or Specific Requirement: Per 2CFR § 200.303(a), nonfederal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal 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).
COSO/Internal Control Framework defines control activities as “policies and procedures that help ensure management’s directives are carried out.” Management review controls are defined as, “the activities of a person, different than the preparer, through analyzing and performing oversight of activities performed, and is an integral part of any internal control structure.”
Questioned Costs: None
Condition/Context: The Commission did not maintain evidence of the approval of inventory expenditures charged to the grant for the first eight months of fiscal year ended June 30, 2023.
Cause: The Commission did not have sufficient policies and procedures over internal controls to maintain evidence of review and approval of inventory expenditures are properly documented until March 2023.
Effect: Inventory expenditures may be charged to the grant that are not eligible.
Repeat Finding: This is a repeat finding.
Recommendation: We recommend the Commission continue with established policies and procedures implemented in March 2023 over internal controls to ensure review and approval of inventory expenditures are properly documented.
Views of Responsible Officials: Management agrees with the finding.