NORTHERN ELECTRIC COOPERATIVE, INC.Non-Profit

Department of Homeland Security, State of South Dakota Office of Emergency Management, Federal Financial Assistance Listing #97.039, DR-4656-25R, DR-4656-26R, & DR-5418-15R, 2025 Hazard Mitigation Grant Program Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Cooperative does not have an internal control system designed to provide for a complete and accurate schedule of federal expenditures of federal awards being audited. As auditors, we were requested to assist with the preparation of the schedule and accompanying notes to the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Cooperative meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Cooperative would not be able to draft a complete and accurate schedule. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding form Prior Year: No Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, it is important that the Cooperative is aware of this condition for financial reporting requirements relating to the Cooperative’s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.