ATLANTIC COUNCIL OF THE UNITED STATES, INC. (THE)

2022 ? 001 Procurement ? Suspension and Debarment Federal Agency: U.S. Department of State Federal Program Title: Improve Relations Between Stakeholders in the United States and Other Countries/Promoting American Leadership, Democratic Values, and Economic Prosperity Federal Assistance Listing Number: 19.040/19.700 Award Period: September 30, 2019 ? December 31, 2024/September 27, 2019 ? March 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Atlantic Council of the United States, Inc. should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted The Atlantic Council of the United States, Inc. did not have documentation to support that internal controls were performed to ensure vendors were not suspended or debarred prior to entering into the contract. Questioned costs: None Context: During our testing, it was noted that for 5 of 5 items tested that The Atlantic Council of the United States, Inc. did not have documentation to support that it had reviewed vendors prior to entering into a contract with a vendor to ensure the vendor was not on the suspended or debarred vendor list maintained by the General Services Administration. We verified that the selected vendor was not suspended or debarred. Cause: The Atlantic Council of the United States, Inc. was unable to locate documentation to support the performance of procedures to ensure vendors were not suspended or debarred. Effect: The auditor noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Recommendation: We recommend The Atlantic Council of the United States, Inc. design controls to ensure an adequate review process is in place to review potential vendors to determine they are not suspended or debarred and to ensure documentation to support this is maintained. Views of responsible officials: Management accepts the audit finding, noting that internal controls were in place but not able to be verified. The Council staff followed procurement procedures, but documentation did not sufficiently show timeliness. As of the audit finalization, relevant processes have been modified to ensure that the issue does not recur.

2019-001 Federal agency: United States Department of State Federal program title: Supporting a Political Resolution in Venezuela CFDA Number: 19.121 Award Period: September 14, 2017 - January 31, 2020 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with allowability. The Council should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted the Council did not have adequate internal controls designed to ensure payroll expenditures were properly charged to the grant. Questioned costs: None over $25,000. Context: During our testing, it was noted that the Council switched payroll systems in the middle of the year. The data was extracted from their new payroll provider and the macro utilized to import the data did not allocate timesheet data properly. As a result, the data imported into the payroll journal entries contained small errors in the allocation of salary expenses. Cause: The Council did not have proper internal controls in place to ensure accurate posting of payroll amounts charged to the grant. Effect: This resulted in payroll amounts being improperly charged to the grant. Recommendation: We recommend the Council implement controls to ensure amounts charged to the grant are appropriate at the time of recording. Views of responsible officials and planned corrective actions: The extrapolated estimate of this error was roughly $6,000 in payroll costs ? an immaterial amount, and thus if falls under the threshold for a ?questioned cost?. During monthly and quarterly financial reviews by the finance and program teams, the error was small enough to go undetected. However, due to changes made to payroll processing during the year, the cause of the error has been eliminated, going forward.

2019-002 Federal agency: United States Department of State Federal program title: Supporting a Political Resolution in Venezuela CFDA Number: 19.121 Award Period: September 14, 2017 - January 31, 2020 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: 2 CFR Part 200 Section 200.303 Financial records, supporting documents, statistical records, and all other non-federal entity records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the federal awarding agency. Condition: During testing of reporting, we noted that there was no backup documentation available for non-financial data recorded in the progress reports. Questioned costs: None Context: Two out of two progress reports selected did not have adequate evidence to support the non-financial data disclosed in the progress reports Cause: There is no process to obtain and store documentation related to the non-financial data reported in the progress reports Effect: There is the potential for the completion of inaccurate or false progress reports. Recommendation: We recommend the Council implement a formal procedure that includes gathering and storing documentation for progress reports either electronically or hardcopy in the office. Views of responsible officials and planned corrective actions: Unavailable documentation was often sensitive in nature due to the confidentiality of the project, and so was not kept. Management accepts the finding and will find ways to establish enhanced internal controls over compliance going forward.

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