Audit 366629

Department of Homeland Security and Emergency Management Federal Financial Assistance Listing 97.036 Disaster Grant – Public Assistance Allowable Costs/Activities Allowed or Unallowed Material Weakness in Internal Control Over Compliance Criteria – A good system of internal accounting control contemplates an adequate system for ensuring documentation of expenditures, including payroll transactions, is reviewed and maintained. Condition – In our testing of allowable costs and activities, we noted instances where payroll expenditures were paid by the Cooperative at the correct wage rates but federal reimbursement for hours worked was calculated using the incorrect wage rates. Cause – Procedures are not in place to adequately identify improper wage rates applied to payroll transactions. Effect – The deficiency could result in a misstatement to the financial statements that would not be prevented or detected. Questioned Costs – None reported. Context/Sampling – A nonstatistical sample of 60 transactions out of a population greater than 250 total transactions were selected for testing, which accounted for $324,383 of $1,558,311 of federal program expenditures. Repeat Finding from Prior Years – No Recommendation – A thorough review and reconciliation of supporting documentation for expenditures, including payroll transactions, should be performed before amounts are claimed for reimbursement. Views of Responsible Officials – There is no disagreement with the audit finding.