INNOVATE WASHINGTON FOUNDATION

During our testing of allowable costs, we discovered that one of the 14 payroll costs tested had an incorrect allocation. CLA determined this to be an isolated incident after review of additional pay periods and discussion with IWF.

2021 ? 002 Federal agency: U.S. Department of Commerce Federal program title: Economic Adjustment Assistance Assistance Listing Number: 11.307 Award Period: Type of Funding: ? Significant Deficiency ? Review of Reports and Reimbursement Requests Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 200.303 specifies that a nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Documentation of review and approval of reports was not adequate. Context: Of the twelve reports selected for testing (there were 21 in the population), we noted that one of them did not have documentation of approval prior to submission. This was not a statistically valid sample. Cause: Proper internal control processes and procedures were put into place midway through the year to provide evidence of review and approval of the required reports. Effect: Amounts reported could contain errors or improper amounts without a review process in place. Recommendation: We recommend the IWF retain documentation of approval for each report that is submitted during the year. Views of responsible officials and planned corrective actions: IWF was made aware of this finding by the previous auditors in July 2021 and immediately implemented procedures to include a formal review and approval process prior to submittal of federal reports and reimbursements. The one report noted above as an exception to this process was submitted prior to July 2021 and thus did not follow the new review and approval procedure.

2020-001: Significant Deficiency ? Review of Reports and Reimbursement Requests Federal Agency: U.S. Department of Commerce CFDA Number: 11.307 Program: Economic Adjustment Assistance Federal Award Identification Number: 07-79-07588 and 07-79-05520 Federal Award Year: December 31, 2020 Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, ?200.303 specifies that a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Documentation of review and approval of reports was not adequate. Context: Of the seven reports selected for testing, we noted that none of them had documentation of approval prior to submission. This was not a statistically valid sample. Cause: Proper internal control processes and procedures were not in place to provide evidence of review and approval of the Project Progress Reports, Grant Administrative Plan, SF-425, ED-209s, and SF-270s. Effect: Amounts reported could contain errors or improper amounts without a review process in place. Recommendation: We recommend that IWF retain documentation of approval for each report that is submitted during the year. Views of responsible officials: IWF agrees with the finding. See the attached unaudited corrective action plan.