Georgia Association of Conservation Districts, Inc.

U.S. Department of Agriculture Natural Resources Conservation Service Soil and Water Conservation Program CFDA 10.902 2020-01: Segregation of Duties Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. There needs to be a reconciliation or control activity to provide reasonable assurance that transactions are handled appropriately. Condition: Key duties and functions are not segregated among Association personnel. This is especially a concern in the cash management, account receivable, accounts payable, payroll, and journal entry functions. Effect: Transactions could be mishandled, due to errors or fraud, that could lead to loss of assets or the reporting of misleading financial information. Cause: There are a limited number of personnel for certain functions and lack of board oversight. Identification of a repeat finding: This is a repeat finding from the immediate previous audit. Recommendation: We recommend that duties be segregated as best as possible with the people available. The Board should oversee these areas as much as possible. Monthly financial activity such as journal entries, detail of significant asset and liability balances, bank statements, canceled check images, and reconciliations should be reviewed by the Treasurer for reasonableness. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 29 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Soil and Water Conservation Program CFDA 10.902 2020-02: Maintenance of the General Ledger Criteria: The Association is responsible for preparing annual financial statements in accordance with generally accepted accounting principles (GAAP). The records should be kept on an accrual basis to ensure accurate financial information is being reported to prevent critical financial decisions from being made on erroneous data. Condition: The Association currently maintains its general ledger on the modified accrual basis throughout the year. Failure to record accruals of revenue and expenditures distorts the financial information that is provided to management and the Board. Effect: Misleading financial information could be presented, which could lead to financial decisions being made on erroneous data. Cause: There are no procedures in place to ensure records are kept on an accrual basis. Identification of a repeat finding: This is a repeat finding from the immediate previous audit. Recommendation: We recommend that the Association implement a procedure in which records are kept on the cash basis throughout the year and accrual adjustments be made at year end. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 29 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Soil and Water Conservation Program CFDA 10.902 2020-03: Material noncompliance with terms and conditions of Federal awards Criteria: The recipient is responsible for complying with audit requirements in accordance with 2 CFR 200, Subpart F. A non-Federal entity that expends $750,000 or more during the non-Federal entity’s fiscal year in Federal awards must have a single or program-specific audit conducted for that year. The single audit reporting package must be uploaded to the Federal Audit Clearinghouse within 30 days of receiving the audit report or 9 months after their fiscal year end, whichever comes first. Condition: The Association did not comply with the audit requirements in accordance with 2 CFR 200, Subpart F in regards to timely submission to the Federal Audit Clearinghouse in the fiscal year ended 2023. Effect: Possible ramifications of noncompliance with the terms and conditions of Federal awards include repayment of all Federal awards received, denial of future Federal grants, withdrawal of any support from the Federal level, and potentially lack of support from State and local levels. Cause: Lack of understanding of the Federal award agreement. Identification of a repeat finding: This is a repeat finding from the immediate previous audit. Recommendation: We recommend that the Association should comply with the terms and conditions of Federal awards and that the Program contact require the submission of the required single or program-specific audits for the years not in compliance. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 30 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Soil and Water Conservation Program CFDA 10.902 2020-01: Segregation of Duties Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. There needs to be a reconciliation or control activity to provide reasonable assurance that transactions are handled appropriately. Condition: Key duties and functions are not segregated among Association personnel. This is especially a concern in the cash management, account receivable, accounts payable, payroll, and journal entry functions. Effect: Transactions could be mishandled, due to errors or fraud, that could lead to loss of assets or the reporting of misleading financial information. Cause: There are a limited number of personnel for certain functions and lack of board oversight. Identification of a repeat finding: This is a repeat finding from the immediate previous audit. Recommendation: We recommend that duties be segregated as best as possible with the people available. The Board should oversee these areas as much as possible. Monthly financial activity such as journal entries, detail of significant asset and liability balances, bank statements, canceled check images, and reconciliations should be reviewed by the Treasurer for reasonableness. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 30 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Soil and Water Conservation Program CFDA 10.902 2020-02: Maintenance of the General Ledger Criteria: The Association is responsible for preparing annual financial statements in accordance with generally accepted accounting principles (GAAP). The records should be kept on an accrual basis to ensure accurate financial information is being reported to prevent critical financial decisions from being made on erroneous data. Condition: The Association currently maintains its general ledger on the modified accrual basis throughout the year. Failure to record accruals of revenue and expenditures distorts the financial information that is provided to management and the Board. Effect: Misleading financial information could be presented, which could lead to financial decisions being made on erroneous data. Cause: There are no procedures in place to ensure records are kept on an accrual basis. Identification of a repeat finding: This is a repeat finding from the immediate previous audit. Recommendation: We recommend that the Association implement a procedure in which records are kept on the cash basis throughout the year and accrual adjustments be made at year end. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 30 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Soil and Water Conservation Program CFDA 10.902 2022-01: Documentation for expenditures Criteria: The Organization is responsible for maintaining original documentation for all expenditures. Transactions for expenses should be evidenced by an invoice or other original documentation demonstrating the validity of the disbursement. Condition: The Organization does not consistently maintain documentation for all expenditures, especially those expended with the Organization?s credit card. Effect: Activities or costs that are not allowed or allowable could potentially be paid, as well as errors or intentional fraud could occur and not be detected timely by management in the normal course of their responsibilities. Cause: There are no procedures in place to ensure that original source documents are obtained prior to payment. Identification of a repeat finding: No. Recommendation: We recommend that appropriate documentation is kept for all disbursements, and that credit card receipts are obtained for each purchase and kept with the appropriate statement. Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 30 in this audit report.

2020-04: Material noncompliance with terms and conditions of Federal awards Criteria: The recipient is responsible for complying with audit requirements in accordance with 2 CFR 200, Subpart F. A non-Federal entity that expends $750,000 or more during the non-Federal entity?s fiscal year in Federal awards must have a single or program-specific audit conducted for that year. Condition: The Association did not comply with the audit requirements in accordance with 2 CFR 200, Subpart F in fiscal years ended 2018 and 2019. Effect: Possible ramifications of noncompliance with the terms and conditions of Federal awards include repayment of all Federal awards received, denial of future Federal grants, withdrawal of any support from the Federal level, and potentially lack of support from State and local levels. Cause: Lack of understanding of the Federal award agreement. Identification of a repeat finding: This is a repeat finding from the immediate previous audit. Recommendation: We recommend that the Association should comply with the terms and conditions of Federal awards and that the Program contact require the submission of the required single or program-specific audits for the years not in compliance. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 31 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Environmental Quality Incentive Program CFDA 10.912 2020-01: Segregation of Duties Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. There needs to be a reconciliation or control activity to provide reasonable assurance that transactions are handled appropriately. Condition: Key duties and functions are not segregated among Association personnel. This is especially a concern in the cash management, account receivable, accounts payable, payroll, and journal entry functions. Effect: Transactions could be mishandled, due to errors or fraud, that could lead to loss of assets or the reporting of misleading financial information. Cause: There are a limited number of personnel for certain functions and lack of board oversight. Identification of a repeat finding: This is a repeat finding from the immediate previous audit. Recommendation: We recommend that duties be segregated as best as possible with the people available. The Board should oversee these areas as much as possible. Monthly financial activity such as journal entries, detail of significant asset and liability balances, bank statements, canceled check images, and reconciliations should be reviewed by the Treasurer for reasonableness. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 30 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Environmental Quality Incentive Program CFDA 10.912 2020-02: Maintenance of the General Ledger Criteria: The Association is responsible for preparing annual financial statements in accordance with generally accepted accounting principles (GAAP). The records should be kept on an accrual basis to ensure accurate financial information is being reported to prevent critical financial decisions from being made on erroneous data. Condition: The Association currently maintains its general ledger on the modified accrual basis throughout the year. Failure to record accruals of revenue and expenditures distorts the financial information that is provided to management and the Board. Effect: Misleading financial information could be presented, which could lead to financial decisions being made on erroneous data. Cause: There are no procedures in place to ensure records are kept on an accrual basis. Identification of a repeat finding: This is a repeat finding from the immediate previous audit. Recommendation: We recommend that the Association implement a procedure in which records are kept on the cash basis throughout the year and accrual adjustments be made at year end. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 30 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Environmental Quality Incentive Program CFDA 10.912 2020-03: Approval for expenditures Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. Approvals should be noted on all expenditures by an individual outside of the recordkeeping and custody functions to provide reasonable assurance that transactions are allowable and appropriate for the Association. Condition: The Association does not document an approval process on source documents for expenditures, particularly those related to the Association?s credit card. Effect: Activities or costs that are not allowed or allowable could potentially be paid, as well as errors or intentional fraud could occur and not be detected timely by management in the normal course of their responsibilities. Cause: There are no procedures in place to ensure source documents are approved by a member of management prior to payment. Identification of a repeat finding: This is a repeat finding from the immediate previous audit. Recommendation: We recommend that a member of management or the Board of Directors review and authorize all disbursements, as well as travel reimbursements. This authorization should be evidenced by the initialing of each disbursement reviewed. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 30 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Environmental Quality Incentive Program CFDA 10.912 Section III?Federal Award Findings and Questioned Costs 2020-04: Material noncompliance with terms and conditions of Federal awards Criteria: The recipient is responsible for complying with audit requirements in accordance with 2 CFR 200, Subpart F. A non-Federal entity that expends $750,000 or more during the non-Federal entity?s fiscal year in Federal awards must have a single or program-specific audit conducted for that year. Condition: The Association did not comply with the audit requirements in accordance with 2 CFR 200, Subpart F in fiscal years ended 2018 and 2019. Effect: Possible ramifications of noncompliance with the terms and conditions of Federal awards include repayment of all Federal awards received, denial of future Federal grants, withdrawal of any support from the Federal level, and potentially lack of support from State and local levels. Cause: Lack of understanding of the Federal award agreement. Section III?Federal Award Findings and Questioned Costs (Continued) Identification of a repeat finding: This is a repeat finding from the immediate previous audit. Recommendation: We recommend that the Association should comply with the terms and conditions of Federal awards and that the Program contact require the submission of the required single or program-specific audits for the years not in compliance. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 31 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Soil and Water Conservation CFDA 10.902 2020-01: Segregation of Duties Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. There needs to be a reconciliation or control activity to provide reasonable assurance that transactions are handled appropriately. Condition: Key duties and functions are not segregated among Organization personnel. This is especially a concern in the cash management, account receivable, accounts payable, payroll, and journal entry functions. Effect: Transactions could be mishandled, due to errors or fraud, that could lead to loss of assets or the reporting of misleading financial information. Cause: There are a limited number of personnel for certain functions and lack of board oversight. Identification of a repeat finding: No Recommendation: We recommend that duties be segregated as best as possible with the people available. The Board should oversee these areas as much as possible. Monthly financial activity such as journal entries, detail of significant asset and liability balances, bank statements, canceled check images, and reconciliations should be reviewed by the Treasurer for reasonableness. Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 27 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Soil and Water Conservation CFDA 10.902 2020-02: Maintenance of the General Ledger Criteria: The Organization is responsible for preparing annual financial statements in accordance with generally accepted accounting principles (GAAP). The records should be kept on an accrual basis to ensure accurate financial information is being reported to prevent critical financial decisions from being made on erroneous data. Condition: The Organization currently maintains its general ledger on the cash basis throughout the year. Failure to record accruals of revenue and expenditures distorts the financial information that is provided to management and the Board. Effect: Misleading financial information could be presented, which could lead to financial decisions being made on erroneous data. Cause: There are no procedures in place to ensure records are kept on an accrual basis. Identification of a repeat finding: No Recommendation: We recommend that the Organization implement a procedure in which records are kept on the cash basis throughout the year and accrual adjustments be made at year end. Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 27 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Soil and Water Conservation CFDA 10.902 2020-03: Approval for expenditures Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. Approvals should be noted on all expenditures by an individual outside of the recordkeeping and custody functions to provide reasonable assurance that transactions are allowable and appropriate for the Organization. Condition: The Organization does not document an approval process on source documents for expenditure. Effect: Activities or costs that are not allowed or allowable could potentially be paid, as well as errors or intentional fraud could occur and not be detected timely by management in the normal course of their responsibilities. Cause: There are no procedures in place to ensure source documents are approved by a member of management prior to payment. Identification of a repeat finding: No. Recommendation: We recommend that a member of management or the Board of Directors review and authorize all disbursements, as well as travel reimbursements. This authorization should be evidenced by the initialing of each disbursement reviewed. Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 27 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Soil and Water Conservation CFDA 10.902 2020-04: Material noncompliance with terms and conditions of Federal awards Criteria: The recipient is responsible for complying with audit requirements in accordance with 2 CFR 200, Subpart F. A non-Federal entity that expends $750,000 or more during the non-Federal entity?s fiscal year in Federal awards must have a single or program-specific audit conducted for that year. Condition: The Organization did not comply with the audit requirements in accordance with 2 CFR 200, Subpart F in fiscal years ended 2018 and 2019. Effect: Possible ramifications of noncompliance with the terms and conditions of Federal awards include repayment of all Federal awards received, denial of future Federal grants, withdrawal of any support from the Federal level, and potentially lack of support from State and local levels. Cause: Lack of understanding of the Federal award agreement. Identification of a repeat finding: No. Recommendation: We recommend that the Organization should comply with the terms and conditions of Federal awards and that the Program contact require the submission of the required single or program-specific audits for the years not in compliance. Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 28 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Environmental Quality Incentive Program, Federal Assistance Listing # 10.912 Soil and Water Conservation Program, Federal Assistance Listing # 10.902 2020-01: Segregation of Duties Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. There needs to be a reconciliation or control activity to provide reasonable assurance that transactions are handled appropriately. Condition: Key duties and functions are not segregated among Association personnel. This is especially a concern in the cash management, account receivable, accounts payable, payroll, and journal entry functions. Effect: Transactions could be mishandled, due to errors or fraud, that could lead to loss of assets or the reporting of misleading financial information. Cause: There are a limited number of personnel for certain functions and lack of board oversight. Identification of a repeat finding: This is a repeat finding from the immediate previous audit of fiscal year ending December 31, 2018. Recommendation: We recommend that duties be segregated as best as possible with the people available. The Board should oversee these areas as much as possible. Monthly financial activity such as journal entries, detail of significant asset and liability balances, bank statements, canceled check images, and reconciliations should be reviewed by the Treasurer for reasonableness. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 31 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Environmental Quality Incentive Program, Federal Assistance Listing # 10.912 Soil and Water Conservation Program, Federal Assistance Listing # 10.902 2020-02: Maintenance of the General Ledger Criteria: The Association is responsible for preparing annual financial statements in accordance with generally accepted accounting principles (GAAP). The records should be kept on an accrual basis to ensure accurate financial information is being reported to prevent critical financial decisions from being made on erroneous data. Condition: The Association currently maintains its general ledger on the modified accrual basis throughout the year. Failure to record accruals of revenue and expenditures distorts the financial information that is provided to management and the Board. Effect: Misleading financial information could be presented, which could lead to financial decisions being made on erroneous data. Cause: There are no procedures in place to ensure records are kept on an accrual basis. Identification of a repeat finding: This is a repeat finding from the immediate previous audit of fiscal year ending December 31, 2018. Recommendation: We recommend that the Association implement a procedure in which records are kept on the cash basis throughout the year and accrual adjustments be made at year end. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 31 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Environmental Quality Incentive Program, Federal Assistance Listing # 10.912 Soil and Water Conservation Program, Federal Assistance Listing # 10.902 2020-03: Approval for expenditures Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. Approvals should be noted on all expenditures by an individual outside of the recordkeeping and custody functions to provide reasonable assurance that transactions are allowable and appropriate for the Association. Condition: The Association does not document an approval process on source documents for expenditures, particularly those related to the Association’s credit card. Effect: Activities or costs that are not allowed or allowable could potentially be paid, as well as errors or intentional fraud could occur and not be detected timely by management in the normal course of their responsibilities. Cause: There are no procedures in place to ensure source documents are approved by a member of management prior to payment. Identification of a repeat finding: This is a repeat finding from the immediate previous audit of fiscal year ending December 31, 2018. Recommendation: We recommend that a member of management or the Board of Directors review and authorize all disbursements, as well as travel reimbursements. This authorization should be evidenced by the initialing of each disbursement reviewed. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 31 in this audit report.

U.S. Department of Agriculture Natural Resources Conservation Service Environmental Quality Incentive Program, Federal Assistance Listing # 10.912 Soil and Water Conservation Program, Federal Assistance Listing # 10.902 2020-04: Material noncompliance with terms and conditions of Federal awards Criteria: The recipient is responsible for complying with audit requirements in accordance with 2 CFR 200, Subpart F. A non-Federal entity that expends $750,000 or more during the non-Federal entity’s fiscal year in Federal awards must have a single or program-specific audit conducted for that year. Condition: The Association did not comply with the audit requirements in accordance with 2 CFR 200, Subpart F in fiscal years ended 2018 and 2019. Effect: Possible ramifications of noncompliance with the terms and conditions of Federal awards include repayment of all Federal awards received, denial of future Federal grants, withdrawal of any support from the Federal level, and potentially lack of support from State and local levels. Cause: Lack of understanding of the Federal award agreement. Identification of a repeat finding: This is a repeat finding from the immediate previous audit of fiscal year ending December 31, 2018. Recommendation: We recommend that the Association should comply with the terms and conditions of Federal awards and that the Program contact require the submission of the required single or program-specific audits for the years not in compliance. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 32 in this audit report.

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