Audit of MCC’s Financial Statements for Fiscal Years 2022 and 2021

Audit Report
Report Number
0-MCC-23-002-C

Why We Did This Audit

  • The Government Management Reform Act of 1994 requires annual audits of the financial statements for the agencies we oversee.
  • We contracted with the independent certified public accounting firm of RMA Associates LLC (RMA) to conduct an audit of MCC’s financial statements for fiscal years 2022 and 2021.
  • The audit objectives were to: (1) express an opinion on whether the financial statements as of September 30, 2022 and 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.

What We Found

  • RMA concluded that MCC’s financial statements are presented fairly, in all material respects, and in conformity with U.S. generally accepted accounting principles.
  • The audit firm found no material weaknesses in internal control over financial reporting but reported one significant deficiency related to MCC oversight during Millennium Challenge Accounts’ (MCA) closure activities that needs improvement.
  • The audit firm found no reportable noncompliance for fiscal year 2022 with applicable laws, regulations, contracts, and grant agreements.
  • We made six recommendations to address the significant deficiency. MCC agreed with our recommendations.

Why It Matters

  • These audits help ensure a more effective, efficient, and responsive government, in line with the Act. They provide a window into the financial conditions, internal control over financial reporting, and compliance of federal agencies like MCC. The audits also present an opportunity to recommend improvements, as needed.
0-MCC-023-002-C.pdf1.54 MB

Recommendations

Recommendation
1

Develop and document MCC's oversight procedures for verification of Millennium Challenge Accounts' physical verification of all fixed assets acquired with MCC funds annually as required by the Millennium Challenge Accounts' Fiscal Accountability Plan.

Questioned Cost
0
Funds for Better Use
0
Close Date
Recommendation
2

Obtain the Accountable Entity's report summarizing the results of the annual physical count, inspection, and reconciliation, including explanations for any discrepancies noted and follow up on any delays.

Questioned Cost
0
Funds for Better Use
0
Close Date
Recommendation
3

Require the Accountable Entity Chief Financial Officer to review the annual report and approve any adjustments necessary to reconcile Fixed Assets Register with the accounting records.

Questioned Cost
0
Funds for Better Use
0
Close Date
Recommendation
4

Develop and document MCC's oversight procedures to ensure the Accountable Entity's physical count of all Program Fixed Assets is conducted within the required 90 days before the Compact closeout.

Questioned Cost
0
Funds for Better Use
0
Close Date
Recommendation
5

Update MCC's Accountable Entity Audit process to include additional internal controls and monitoring procedures to ensure that any Covered Providers are identified clearly in each Millennium Challenge Accounts Audit Plan and ensure the Millennium Challenge Accounts Audit Plan provides a detailed schedule for completing the required audits of the identified Covered Providers.

Questioned Cost
0
Funds for Better Use
0
Close Date
Recommendation
6

Update MCC's updated monitoring procedures to ensure that Covered Provider audits are completed prior to program closure, as well as formalizing the evaluation and documentation of approvals of any deviations or extensions arising with respect to Covered Provider audits.

Questioned Cost
0
Funds for Better Use
0
Close Date