Finding 2024-001
material weakness
- Program
- CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS (21.027)
- Compliance requirement
- Activities allowed or unallowed; Allowable costs/cost principles; Period of performance
- FAC record
- FY2024 audit on fac.gov
Finding text from the filing
Criteria Management is responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to error, fraudulent financial reporting, or misappropriation of assets. Those charged with governance are responsible for oversight of management's system of internal control, including establishing expectations for ethical conduct and financial accountability and monitoring the effectiveness of controls implemented by management. Condition and Context The Organization has limited segregation of duties over certain financial reporting and compliance-related processes, as key responsibilities for initiating, reviewing, and approving transactions and reports were concentrated with a limited number of individuals. In addition, oversight by those charged with governance was not performed effectively to support the design and monitoring of compensating controls over these processes. Cause The Organization’s size and staffing structure resulted in reliance on a limited number of individuals to perform multiple financial and reporting functions, and compensating review controls were not consistently applied. Effect Lack of properly designed control increase risk that fraud or error could occur in financial reporting or compliance-related activities and not be prevented or detected on a timely basis. Recommendation Management should enhance segregation of duties and oversight by implementing and documenting compensating review controls, including independent review of key transactions and reports by other members of management or those charged with governance. Views of Responsible Official Management agrees with the audit finding. A corrective action plan has been developed and is included to address the identified deficiency.