Audit 371132

2 CFR § 200.303 (a) states, in part, the non-Federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal award. 2 CFR 200.302(b)(7) requires written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award. In addition, maintaining organized documentation and support for federal transactions is essential in assuring the Townships Schedule of Federal Awards is complete and accurate and that costs and activities are allowable. We noted that the Township did not maintain underlying documentation and support for 4 of 7 nonpayroll FEMA expenditures. However, we were able to obtain such invoices directly from the Ohio Emergency Management Agency to determine allowability. For the remaining 3 invoices that the Township did maintain support for, there was no indication that management reviewed these expenditures for allowability. This weakness could result in unallowable expenditures being charged to the FEMA grant. Formal written procedures should be developed, implemented, and consistently applied to the approval of federal grant expenditures prior to payment. Procedures should include how approvals by management or administrators are documented for each expenditure and the approvals should be done by personnel knowledgeable about the federal program. Implementing a formal control process with help ensure only allowable expenditures are made using federal grant funds. The Township should also maintain all invoices for transaction to ensure allowability.