2022-003 Reporting U.S. Department of Justice – Crime Victim Assistance – ALN 16.575
Criteria: 2 CFR 200 requires that internal controls over compliance exist to ensure that the Organization complies with the requirements for reporting of program results. The grant agreement with MDHHS requires quarterly performance reporting to be completed 15 days after each quarter.
Condition: The Organization did not have an effective internal control system in place in regard to internal controls over compliance for reporting timely. Five of six reports tested were not submitted timely for Crime Victim Assistance.
Effect of Condition: The lack of internal controls could lead to a misstatement of financial and program reports and resulted in noncompliance.
Cause of Condition: The Organization did not implement an internal control process over timely reporting.
Recommendation: The Organization should implement an internal control system that includes the timely submission of reports.
2022-004 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance U.S. Department of Justice – Crime Victim Assistance – ALN 16.575 (Similar repeat finding, see 2021-003)
Criteria: Section 200.303 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a non-Federal entity to establish and maintain effective internal control over the Federal award that provides a reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with the specified guidance that requires proper segregation of duties by dividing key responsibilities among different people to reduce the risk of error or fraud. This should include separating the responsibilities for authorizing transactions, processing and recording them, reviewing the transactions, and handling any related assets. No one individual should control all key aspects of a transaction or event. In addition, this guidance also requires transactions and internal controls to be clearly documented, and the records should be properly maintained and readily available for examination.
Condition: The Organization did not have an effective internal control system in place in regard to approving invoices and maintaining documentation. Six of 40 disbursements tested were not approved by the Executive Director and there was no supporting documentation for 12 of the 40 tested.
Effect of Condition: $4,257 of the $15,460 expenditures tested are considered known questioned costs. $83,056 of a population of $301,651 are considered likely questioned costs due to not maintaining supporting documentation.
Cause of Condition: The Organization experienced personnel changes within key positions, which left the Organization understaffed to properly approve invoices and maintain documentation.
Recommendation: The Organization should follow its cash disbursements policy to maintain invoices and have them approved by appropriate levels of management prior to the issuance of checks.
Finding 2022-005: Crime Victim Assistance Suspension and Debarment Procedures U.S. Department of Justice – Crime Victim Assistance – ALN 16.575 (Similar repeat finding, see 2021-006)
Criteria: Section 200.214 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. This guidance requires a non-federal entity to establish policies and procedures for verifying the status of contractors and vendors whenever the value of a contract or cumulative transactions is expected to equal or exceed $25,000 to protect the federal government from fraud, waste and abuse.
Condition: During our detailed testing of suspension and debarment for the Crime Victim Assistance program, we noted that the Organization did not have a procedure in place to verify that its contractors and vendors receiving payments in excess of $25,000 were not suspended or debarred prior to doing business with them.
Effect of Condition: Two vendors charged to the Crime Victim Assistance program received payments in excess of the $25,000 testing threshold during the fiscal year. The Organization did not perform the necessary suspension or debarment testing prior to doing business with them. A subsequent vendor search on the federal System for Award Management (SAM.gov) website indicated that the vendors were eligible for participation in federal assistance programs or activities.
Cause of Condition: Entity personnel failed to verify the status of contractors and vendors prior to entering into business contracts or transactions.
Recommendation: The Organization should implement an internal control system that includes verifying vendors charged over $25,000 to federal grants are reviewed on the SAM.gov website.
2022-003 Reporting U.S. Department of Justice – Crime Victim Assistance – ALN 16.575
Criteria: 2 CFR 200 requires that internal controls over compliance exist to ensure that the Organization complies with the requirements for reporting of program results. The grant agreement with MDHHS requires quarterly performance reporting to be completed 15 days after each quarter.
Condition: The Organization did not have an effective internal control system in place in regard to internal controls over compliance for reporting timely. Five of six reports tested were not submitted timely for Crime Victim Assistance.
Effect of Condition: The lack of internal controls could lead to a misstatement of financial and program reports and resulted in noncompliance.
Cause of Condition: The Organization did not implement an internal control process over timely reporting.
Recommendation: The Organization should implement an internal control system that includes the timely submission of reports.
2022-004 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance U.S. Department of Justice – Crime Victim Assistance – ALN 16.575 (Similar repeat finding, see 2021-003)
Criteria: Section 200.303 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a non-Federal entity to establish and maintain effective internal control over the Federal award that provides a reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with the specified guidance that requires proper segregation of duties by dividing key responsibilities among different people to reduce the risk of error or fraud. This should include separating the responsibilities for authorizing transactions, processing and recording them, reviewing the transactions, and handling any related assets. No one individual should control all key aspects of a transaction or event. In addition, this guidance also requires transactions and internal controls to be clearly documented, and the records should be properly maintained and readily available for examination.
Condition: The Organization did not have an effective internal control system in place in regard to approving invoices and maintaining documentation. Six of 40 disbursements tested were not approved by the Executive Director and there was no supporting documentation for 12 of the 40 tested.
Effect of Condition: $4,257 of the $15,460 expenditures tested are considered known questioned costs. $83,056 of a population of $301,651 are considered likely questioned costs due to not maintaining supporting documentation.
Cause of Condition: The Organization experienced personnel changes within key positions, which left the Organization understaffed to properly approve invoices and maintain documentation.
Recommendation: The Organization should follow its cash disbursements policy to maintain invoices and have them approved by appropriate levels of management prior to the issuance of checks.
Finding 2022-005: Crime Victim Assistance Suspension and Debarment Procedures U.S. Department of Justice – Crime Victim Assistance – ALN 16.575 (Similar repeat finding, see 2021-006)
Criteria: Section 200.214 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. This guidance requires a non-federal entity to establish policies and procedures for verifying the status of contractors and vendors whenever the value of a contract or cumulative transactions is expected to equal or exceed $25,000 to protect the federal government from fraud, waste and abuse.
Condition: During our detailed testing of suspension and debarment for the Crime Victim Assistance program, we noted that the Organization did not have a procedure in place to verify that its contractors and vendors receiving payments in excess of $25,000 were not suspended or debarred prior to doing business with them.
Effect of Condition: Two vendors charged to the Crime Victim Assistance program received payments in excess of the $25,000 testing threshold during the fiscal year. The Organization did not perform the necessary suspension or debarment testing prior to doing business with them. A subsequent vendor search on the federal System for Award Management (SAM.gov) website indicated that the vendors were eligible for participation in federal assistance programs or activities.
Cause of Condition: Entity personnel failed to verify the status of contractors and vendors prior to entering into business contracts or transactions.
Recommendation: The Organization should implement an internal control system that includes verifying vendors charged over $25,000 to federal grants are reviewed on the SAM.gov website.