Audit 336057

Criteria - 2 CFR Part 200, Subpart D, paragraph 200.302 (b)(3) - Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Condition - Expenditures were claimed as federal expenditures for the purchase of supplies even though the purchase agreement had not been fulfilled and supported by appropriate source documentation. Questioned Costs - Expenditiures in the amount of $258,750 for incomplete purchase transactions were reported to the grantor. Context - Supplies for the federal program were budgeted, ordered and approved, but due to delays in delivery by the vendor, the orders were not completed by the end of the fiscal year. Checks were prepared in anticipation of completion of the orders and expenditures were recorded and reported to the grantor even though the prepared checks were held by management. Effect - Program expenditures were overstated by $258,750. Cause -The procedures for approval and preparation of payment for supplies were completed even though the supply purchase agreement had not been fulfilled. Recommendation - The District should amend and submit corrected reports to the Grantor. Any expenditure reimbursements received should be refunded to the Grantor. Procedures for payment of supplies should not be completed until the purchase agreement terms have been fulfilled by the vendor. Management's response - All funds have been refunded to state agency and expense reports amended appropriately.

Criteria - 2 CFR Part 200, Subpart D, paragraph 200.302 (b)(3) - Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Condition - Expenditures were claimed as federal expenditures for the purchase of supplies even though the purchase agreement had not been fulfilled and supported by appropriate source documentation. Questioned Costs - Expenditiures in the amount of $258,750 for incomplete purchase transactions were reported to the grantor. Context - Supplies for the federal program were budgeted, ordered and approved, but due to delays in delivery by the vendor, the orders were not completed by the end of the fiscal year. Checks were prepared in anticipation of completion of the orders and expenditures were recorded and reported to the grantor even though the prepared checks were held by management. Effect - Program expenditures were overstated by $258,750. Cause -The procedures for approval and preparation of payment for supplies were completed even though the supply purchase agreement had not been fulfilled. Recommendation - The District should amend and submit corrected reports to the Grantor. Any expenditure reimbursements received should be refunded to the Grantor. Procedures for payment of supplies should not be completed until the purchase agreement terms have been fulfilled by the vendor. Management's response - All funds have been refunded to state agency and expense reports amended appropriately.