Audit 396485

Program disbursements lacked proper documented support Condition: Certain program transactions selected for testing either failed to contain authorized approval for disbursement or documentation supporting the disbursement could not be located. Fraudulent activity perpetrated by the staff accountant was discovered by management during 2025. The transactions referred to above have not been identified by management as being fraudulent. Criteria: All disbursement transactions should be properly authorized for payment and supported with adequate documentation. The filing of all disbursement support should allow for sufficient access. Cause: The staff accountant failed to obtain documented management approval for select program disbursements. In addition, management failed to locate certain transaction documents selected for testing. Effect: Certain program expenditures lacked proper approved documentation support. Context: A sample of 30 non-payroll-related disbursements were selected for the audit from a population of 163 nonpayroll-related disbursements. The test found three disbursements that lacked proper approval with questioned costs of $2,448 and four disbursements where documentation support could not be located with questioned cost of $965. The total amount of questioned costs for program non-payroll-related disbursements could not be determined. Recommendation: The Organization should examine policies and procures involving the approval process to make sure that all program disbursements are properly approved prior to payment. Management should evaluate the maintenance of disbursement documentation to ensure all documentation is readily accessible. Views of the responsible officials and planned corrective action: The Organization agrees with the finding and will develop and implement additional policies and procedures to ensure all transactions are authorized. Management will monitor these additional policies and procedures to make sure approvals are obtained. See current year corrective action plan.

Indirect cost proposal Condition: The latest indirect cost proposal filed with U.S. Department of Health and Human Services, the oversight agency for indirect costs, was based on the September 30, 2019 fiscal year. Criteria: Appendix IV to Part 200-Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit Organizations, Section C2c, Notification and Approval of Rates stipulates, in part, Organizations that have previously established indirect cost rates must submit a new indirect cost proposal to the oversight agency for indirect costs within six months after the close of each fiscal year. Cause: Not determinable. Effect: The Organization is in noncompliance with appendix IV to Part 200, Section C2c. An indirect cost proposal based on audited financial statements was not filed with the oversight agency for indirect costs within six months after the close of the fiscal year. Recommendation: File an indirect cost proposal with U. S. Department of Health and Human Services based on audited financial statements. In addition, establish procedures to ensure that an indirect cost proposal is filed with the oversight agency for indirect costs within six months after the close of each fiscal year. Views of responsible officials and planned corrective action: The Organization agrees with this finding and will submit the indirect cost proposal to U. S. Department of Health and Human Services based on the audited financial statements. Procedures will be established to ensure an indirect cost proposal is filed with the oversight agency for indirect costs within six months after the close of each fiscal year in the future. See current year corrective action plan.