Core Issue: The Organization lacks written policies required by Uniform Guidance for key areas like internal controls and financial management.
Impacted Requirements: Non-compliance with 2 CFR regulations could lead to improper expense management and potential funding issues.
Recommended Follow-Up: Update the fiscal manual to include necessary policies to ensure compliance with Uniform Guidance.
Finding Text
#2022-007 – Significant Deficiency – Special Tests
Criteria
Uniform Guidance (UG) requires non-Federal entities that receive grant funding to have written policies in the following areas:
Internal Controls (2 CFR 200.303)
Travel (2 CFR 200.474)
Financial Management and Accounting which includes Cash Management and Allowability (2CFR 200.302)
Personnel Compensation – Time and Effort Reporting (2CFR 200.430(i))
Conflict of Interest/Disclosures (2CFR 200.318)
Procurement (2CFR 200.319)
Condition
During the audit we noted that the Organization does not have written policies in place over these areas in accordance with UG.
Cause
The Organization was not aware of the requirement to have these written policies in place.
Effect
The potential effect of not having these policies in place is that the Organization’s expenses are not in accordance with UG.
Questioned Costs
None
Perspective Information
No policies or procedures were noted that are in accordance with UG. As a response to the prior year finding, the Organization noted that they will add policies to the fiscal manual for future compliance.
Identification as a repeat finding
A similar issue was noted in prior year finding #2021-007.
Recommendation
We recommend that the Organization update the fiscal manual to include policies that are compliant with UG.