The audit covered CUC’s annual financial condition for the fiscal year that ended Sept, 30, 2010.
The report noted either late submission of reports or reports not provided for audit involving 34 grant awards.
There were three grant awards based on CUC’s interim financial status reports, but the audit report did not disclose their amounts.
“CUC should establish and implement internal controls and monitoring procedures to ensure that federal award reporting requirements are strictly adhered,” the report stated.
CUC, in its response, said it established a formal federal compliance section in FY 2010.
“The section head will establish monitoring controls and procedures to ensure CUC’s compliance with the requirements of federal grants received,” CUC said.
According to the report, CUC also lacked monitoring of compliance with grant requirements.
“Since the majority of CUC awards prior to fiscal year 2010 were passed-through the CNMI government and CUC’s management did not have spending authority, CUC is unable to timely obtain information and has not formally established monitoring controls over federal award,” the report stated.
CUC said grants received prior to FY 2010 were passed through from the CNMI central government so “the reporting requirement lies with the CNMI central government.”
The report recommended that “CUC should conduct physical inventory of its capital assets and update its asset listing….”
CUC said it will review its utility plant policies and procedures and develop physical inventory counting procedures.
