Audit of MCC’s Financial Statements for Fiscal Years 2021 and 2020

Audit Report
Report Number
0-MCC-22-006-C

We contracted with the independent certified public accounting firm of RMA Associates LLC (RMA) to conduct an audit of the Millennium Challenge Corporation’s (MCC’s) financial statements for fiscal year 2021. The audit objectives were to: (1) express an opinion on whether the financial statements as of September 30, 2021, were presented fairly, in all material respects; (2) evaluate MCC’s internal control over financial reporting; and (3) determine whether MCC complied with applicable laws, regulations, contracts, and grant agreements. The financial statements of MCC as of September 30, 2020, were audited by CliftonLarsonAllen LLP, whose report dated November 13, 2020, expressed an unmodified opinion on those financial statements. RMA concluded that MCC’s financial statements for the fiscal year ending September 30, 2021, are presented fairly, in all material respects, and in conformity with U.S. generally accepted accounting principles. RMA found no reportable noncompliance for fiscal year 2021 with provisions of applicable laws, regulations, contracts, and grant agreements. The audit firm found no material weaknesses but reported one significant deficiency related to MCC oversight and internal control over the Millennium Challenge Accounts’ financial reporting (modified repeat finding). We made six recommendations to address the deficiency.

Recommendations

Recommendation
1

Ensure that MCA project directors receive additional training on the documentation requirements they are responsible for to ensure timely processing of payments in accordance with the Fiscal Accountability Plan

Questioned Cost
0
Funds for Better Use
0
Recommendation
2

Institute controls such as automated system reminders (i.e., Outlook Calendar Reminders) with the appropriate personnel within the MCC to help mitigate the risk of MCAs not meeting the Monthly Commitments and Disbursement Reports reporting time requirement.

Questioned Cost
0
Funds for Better Use
0
Recommendation
3

Provide additional training to the MCAs regarding revisions to be made to MCC's Grant Accrual Guidance. Specifically, emphasize the responsibility of the MCA to identify all open contracts and require the project director/engineer over those contracts to provide an accrual estimate or a written explanation for why one is not needed to obtain full coverage.

Questioned Cost
0
Funds for Better Use
0
Recommendation
4

Revise MCC's Grant Accrual Guidance to incorporate current data call requirements for the MCAs to identify open contracts.

Questioned Cost
0
Funds for Better Use
0
Recommendation
5

Provide additional training to the MCAs to ensure the MCAs have a clear understanding of the grant accrual validation requirements.

Questioned Cost
0
Funds for Better Use
0
Recommendation
6

Include the instructions provided to the accountable entities regarding the validation process within the Grant Accrual Guidance.

Questioned Cost
0
Funds for Better Use
0