Audit 372420

Criteria Per 2 CFR §200.403 and the Organization’s internal control policies, all expenditures must be properly authorized and documented to ensure allowability and compliance with federal requirements. Condition During disbursement testing, we noted that 6 out of 40 transactions tested did not have proper documentation evidencing required approvals prior to payment. Cause The lack of documentation appears to be due to inconsistent application of internal controls and inadequate maintenance of approval records. Effect Without proper approval documentation, there is an increased risk of unallowable or unauthorized expenditures being charged to the federal program. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of the 40 disbursements selected for testing, 6 disbursements, or 15% of our sample, had no proper documentation with approval. Identification as a Repeat Finding, if applicable Not applicable Recommendation CVCA should strengthen its internal controls to ensure that all disbursements are properly reviewed and approved in accordance with established policies. This includes maintaining adequate documentation of approvals for all transactions. View of Responsible Officials CVCA agrees with the finding.

Criteria Per 2 CFR §200. 414, De minimis rate. The de minimis rate of 10% of modified total direct costs (MTDC) can be used indefinitely by organizations that have never had a negotiated indirect cost rate. Condition During the audit, it was noted that CVCA applied an indirect cost rate exceeding the 10% de minimis rate to certain expenditures. Cause CVCA did not adequately monitor the amount of indirect costs applied to their current award. Effect CVCA charged indirect costs in excess of the permitted de minimis rate to the federal award, resulting in questioned costs. Questioned Costs $180,004 Identification as a Repeat Finding, if applicable Not applicable Recommendation It is recommended that CVCA implement procedures to regularly monitor the application of indirect cost rates to ensure compliance with applicable federal regulations. View of Responsible Officials CVCA agrees with the finding.