NORTHERN FOREST CENTER, INC.Non-Profit

Finding Number: 2025-001 Award Identification: Assistance listing program title and number: NSF Technology, Innovation, and Partnerships – 47.084 Federal award identification number: 2303493 Award Date: May 9, 2023 Name of the federal agency: National Science Foundation Repeat Finding: No Questioned Costs: There are no questioned costs related to this finding Type of Finding: Significant Deficiency in Internal Control over Cash Management Criteria: Section 2 CFR 200.305 establishes the requirements over the management of federal payments. Under this regulation, the grantee must minimize the time lapse between the draw down of federal funds and the disbursement of those funds as well as demonstrate written procedures and a system of financial management that meets control and accountability requirements. Condition: While testing of internal controls over cash management it was noted that the Center did not follow the procedures in place for the draw down of federal funds. Cause: The Center was guided by the NSF program manager to draw down the funds as they became available in accordance with the grant agreement as opposed to following procedures in accordance with Section 2 CFR 200.305. Effect: The Center did not incur the costs in-line with the draw down of federal funds. Recommendation: We recommend the Center follow cash management procedures in accordance with Section 2 CFR 200.305. These procedures should ensure that funds are drawn on a reimbursement basis, supported by actual expenditures incurred or very soon to be incurred and paid. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.

Financial Statement Finding 2022-001 Criteria: Management is responsible for establishing and maintaining internal controls and for the fair presentation of the financial statements including the related disclosures, in conformity with accounting principles generally accepted in the United States. Condition: The Center's internal control over financial reporting does not end at the general ledger but extends to the financial statements and notes. As part of our professional services for the year ended April 30, 2022, Wipfli LLP assisted in drafting the financial statements and notes. It is the responsibility of management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Because the Center relies on Wipfli LLP to provide the necessary understanding of current accounting and disclosure principles in the preparation of the financial statements and notes, a significant deficiency exists in the Center's internal controls. Cause: The Center relies on the audit firm to prepare the annual financial statements and related footnote disclosures. However, they have reviewed and approved the annual financial statements and the related footnote disclosures. Effects or Potential Effects: The completeness of the financial statement disclosures and the accuracy of the overall financial presentation is negatively impacted as external auditors do not have the same comprehensive understanding of the Center as its internal staff. Auditor?s Recommendation: Management should continue to review and approve the annual financial statements and the related footnote disclosures. View of responsible officials and planned corrective actions: The Center does not have the resources and staff to prepare the financial statements and disclosures but will continue to oversee the auditor?s services and review and approve the financial statements and footnotes.