Audit 293311

Criteria: Under the Uniform Guidance, specifically 2 CFR 200.403(g), charges to Federal awards must be documented and supported by a system of internal controls, including documentation of approval of expenses. Condition: Documentation for certain expenses was unavailable or incomplete. Cause: Management currently lacks sufficient resources to locate all supporting documentation. The work from home environment has impacted existing processes and retention of information, along with turnover in the accounting department. Effect: Management was unable to fully substantiate $71,054 of $168,234 of nonpayroll items selected for testing. These are determined to be questioned costs. Context: We tested 40 haphazardly selected expense items. Of these, management was unable to locate complete documentation for four expenses, including two payments made and two journal entries to accrue expenses. Recommendation: Management should revise its transaction documentation system to allow for centralized and accessible storage of support for programmatic costs by all appropriate personnel who interact with external auditors, including local funding sources. For accrued items, management should retain journal entry documentation including invoices included within accrued amounts. Views of responsible officials: We agree with the finding. We are in the process of developing a formal contract management system and process that includes additional review and oversight. We are also in the process of hiring a grants and contracts compliance manager.

Criteria: Under the Uniform Guidance, specifically 2 CFR 200.403(g), charges to Federal awards must be documented and supported by a system of internal controls, including documentation of approval of expenses. Condition: Documentation for certain expenses was unavailable or incomplete. Cause: Management currently lacks sufficient resources to locate all supporting documentation. The work from home environment has impacted existing processes and retention of information, along with turnover in the accounting department. Effect: Management was unable to fully substantiate $71,054 of $168,234 of nonpayroll items selected for testing. These are determined to be questioned costs. Context: We tested 40 haphazardly selected expense items. Of these, management was unable to locate complete documentation for four expenses, including two payments made and two journal entries to accrue expenses. Recommendation: Management should revise its transaction documentation system to allow for centralized and accessible storage of support for programmatic costs by all appropriate personnel who interact with external auditors, including local funding sources. For accrued items, management should retain journal entry documentation including invoices included within accrued amounts. Views of responsible officials: We agree with the finding. We are in the process of developing a formal contract management system and process that includes additional review and oversight. We are also in the process of hiring a grants and contracts compliance manager.