Finding Text
Condition: Management and the Board of Directors incorrectly assumed the Association did not have a Single Audit requirement for fiscal year ending 2023. There is a control established for management and Board of Directors to review funding agreements, however, the control was ineffective at identifying the Single Audit requirement.
Criteria: The Association’s review of funding source agreements should properly identify Single Audit requirements. This is vital to ensure all of its obligations and requirements are completely fulfilled.
Cause: There was a procedure in place to review grant and other funding source agreements, however, the Single Audit requirement was not appropriately identified.
Effect: It’s reasonably possible that this deficiency could have resulted in non-compliance of the Single Audit requirement as well as the direct and material compliance requirements associated with the federal funding program. Unchecked compliance and internal controls over compliance could have resulted in undetected issues. It is vital to ensure the Associations identifies all of its obligations and requirements and allocates resources necessary to ensure they are completely fulfilled.
Recommendation: We recommend that personnel review contract and grant agreements to properly identify Single Audit requirements. We also recommend, if there is any uncertainty in source of funds (Federal v. State), that appropriate Federal and State officials are contacted to resolve the uncertainty.