Audit 309904

Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs, Cash Management, and Reporting. Criteria: The Organization is required to exercise internal control oversight over significant reports, allowable costs, and cash management requests for reimbursements filed with a federal funder. Condition: The Organization prepared the required reports and requests for reimbursements, but did not have another individual review them before or after they were filed with the funder. There was no documentation in 2 of 10 payroll samples that the payroll time sheet reports were reviewed by the designated second individual prior to processing and paying. Context and Cause: The Organization was not made aware that federal reports and requests for reimbursement should have internal control oversight procedures, and did not exercise such oversight. Only one individual was responsible for preparing and filing these documents. The payroll time sheet review process was inconsistently followed, and there is not a process for the processed payroll reports to be reviewed by a second individual. Questioned Costs: None. Effect: Reporting and cash management requests for reimbursement requirements lacked oversight, resulting in a lack of awareness of what was being reported as program income in one case for example, and an opportunity for erroneous claims for reimbursement being filed with a funder. Payroll time allocated to grants was inconsistently approved and lacked sufficient oversight. Recommendation: We recommend management implement procedures to ensure the Uniform Grant Guidance and the Compliance Supplement requirements for controls over Reporting, Allowable Costs, and Cash Management are designed and performed. The month-end checklist currently being used is a good start, and this could be enhanced by adding sections for the above items, and having specific individuals initial and date on the checklist when the procedures are completed. A fiscal policy and procedure manual would also be a good tool. Views of responsible official: Management concurs with the audit finding and will implement corrective action.

Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs, Cash Management, and Reporting. Criteria: The Organization is required to exercise internal control oversight over significant reports, allowable costs, and cash management requests for reimbursements filed with a federal funder. Condition: The Organization prepared the required reports and requests for reimbursements, but did not have another individual review them before or after they were filed with the funder. There was no documentation in 2 of 10 payroll samples that the payroll time sheet reports were reviewed by the designated second individual prior to processing and paying. Context and Cause: The Organization was not made aware that federal reports and requests for reimbursement should have internal control oversight procedures, and did not exercise such oversight. Only one individual was responsible for preparing and filing these documents. The payroll time sheet review process was inconsistently followed, and there is not a process for the processed payroll reports to be reviewed by a second individual. Questioned Costs: None. Effect: Reporting and cash management requests for reimbursement requirements lacked oversight, resulting in a lack of awareness of what was being reported as program income in one case for example, and an opportunity for erroneous claims for reimbursement being filed with a funder. Payroll time allocated to grants was inconsistently approved and lacked sufficient oversight. Recommendation: We recommend management implement procedures to ensure the Uniform Grant Guidance and the Compliance Supplement requirements for controls over Reporting, Allowable Costs, and Cash Management are designed and performed. The month-end checklist currently being used is a good start, and this could be enhanced by adding sections for the above items, and having specific individuals initial and date on the checklist when the procedures are completed. A fiscal policy and procedure manual would also be a good tool. Views of responsible official: Management concurs with the audit finding and will implement corrective action.