Cimarron Watershed AllianceNon-Profit

2025-001 (2024-003) – Segregation of Duties Type of Finding: (A) Material Weakness in Internal Control Over Financial Reporting Questioned Costs: None Condition Due to the small number of employees in the organization, adequate segregation of duties of the accounting functions was not in place before December 31, 2024. Starting in January 2025, internal controls were implemented to help segregate duties, however, as noted below, some issues were still present. • We noted no visible documentation of a review of the bank reconciliations by an appropriate supervisor. • We noted no review or approval of journal entries. • We noted no visible documentation of a review for many cash disbursements.Cause The small office environment makes segregation of duties difficult to manage at times. Effect The current process in place allows for both the initiation and concealment of misstatements that could go undetected. Recommendation We recommend management evaluate the current structure of the cash disbursement process, the account reconciliation process and the journal entry process and implement appropriate segregation of duties. View of Responsible Official and Corrective Action Plan CWA management is in agreement with this finding. They will develop and implement procedures requiring monthly independent reconciliations of all accounts to include bank reconciliations as well as the review of both journal entries and disbursements by an appropriate supervisor.

2025-002 (2024-004) – Written Policies and Procedures Type of Finding: (B) Significant Deficiency in Internal Control Over Financial Reporting Questioned Costs: None Condition During our test of controls, we noticed CWA did not have written policies and procedures in place related to financial controls. Cause Management has internal controls in place; however, they have not formalized the policies in writing and presented them to the appropriate staff. Effect The absence of formal, written internal control policies and procedures increases the risk that errors, noncompliance with federal program requirements, or misuse of federal funds could occur and not be prevented or detected in a timely manner. Recommendation We recommend management develop and implement written internal control policies and procedures to ensure compliance with federal program requirements and provide appropriate training to applicable staff. The procedures should include appropriate review, approval, and monitoring controls. View of Responsible Officials and Corrective Action Plan Management of CWA agrees with this finding and intends to develop and implement written internal control policies and procedures by December 31, 2026. Applicable employees will be trained in these policies and procedures by December 31, 2026.

2025-003 – Reporting Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards (G) Instance of Noncompliance related to Federal Awards Questioned Costs: None Condition During our test of compliance over federal awards, we noticed CWA submitted one required report after the established deadline. Additionally, there is no evidence that reports are reviewed or approved prior to submission. Cause The issue appears to be due to a lack of formal policies and procedures requiring supervisory review and approval of reports before submission, as well as insufficient monitoring of reporting deadlines. Effect Late submission of required reports and a lack of review increase the risk of noncompliance with reporting requirements. It may also result in inaccurate or incomplete information being submitted and could impact funding or oversight decisions by granting agencies. Recommendation We recommend management establish and implement formal procedures to ensure all required reports are prepared, reviewed, and approved by appropriate personnel prior to submission. Additionally, management should implement controls, such as a tracking system or calendar reminders to ensure reports are submitted in a timely manner. View of Responsible Official and Corrective Action Plan CWA management is in agreement with this finding. They will develop and implement procedures requiring review of required reports by an appropriate supervisory and establish procedures to ensure the timely submittal of required reports.

2024-004: Written Policies and Procedures – Significant Deficiency Criteria and Condition: 2 CFR 200.302 requires that the recipient or subrecipient’s financial management system must provide written procedures to implement the requirements of 2 CFR 200.305 (Federal payments) and for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. Additionally, 2 CFR 200.318 requires that the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. Context: Although the Organization follows procedures that minimize the time between reimbursement of dollars and expenditure (2 CFR 200.305), verify payments made are in accordance with subpart E and terms and conditions of the award, and follow procurement standards for vendors, there are no written procedures as required by the CFR. Cause and Effect: The Organization did not maintain written procedures as required by the CFR. Questioned Costs: This finding does not result in questioned costs. Recommendation: We recommend that the Organization formally document the current policies and procedures in place to meet documentation requirements of the CFR. Views of Responsible Officials and Planned Corrective Actions: We will adopt formal policies and procedures that document our current practices and also meet the requirements of the CFR.