RESET is a cost reimbursement grant. The agency maintains an Excel workbook that tracks costs over the course of the 12-month award year. The workbook is updated prior to each month's request for reimbursement.
The grant accountant accrued a reimbursable expense for clothing for September, then inex...
RESET is a cost reimbursement grant. The agency maintains an Excel workbook that tracks costs over the course of the 12-month award year. The workbook is updated prior to each month's request for reimbursement.
The grant accountant accrued a reimbursable expense for clothing for September, then inexplicably entered a slightly different amount into the workbook. This l ne item was selected for audit, and the agency is unable to provide support for the difference. In addition, in October the grant accountant improperly recorded a payroll cost in the General Ledger and the grant workbook. While the documentation clearly shows how the amount was calculated, it was nor a legitimate period cost.
The agency charges expenses to a unique department number in the General Ledger. Costs are assigned in the workbook to one of three categories: reimbursable, ineligible, and pending. The control process calls for the grant accountant to assign each GL expense to a category, then to ensure the workbook ties to the GL for the month and award year-to-date. An initial review indicates the control worked because the cost column for the month consistently matches the GL. A closer review shows that for September, the accountant matched the GL by entering a rounding error.
Rounding errors should be limited to a penny or so. The control failed. The lack of accuracy and attention to detail is regrettable. The grant accountant is no longer with the agency.
The grant accountant is responsible for the integrity of the workbook. The CFO is responsible for the overall integrity of the financial statements. The CFO and grant accountant meet monthly to review the workbook. The CFO reviews the workbook for reasonableness and completeness. This review includes observing the grant accountant's assertion that the workbook matches the GL.
To reduce the risk of future errors, the CFO has
1. Reviewed the monthly process with the new grant accountant, emphasizing the need to match the GL. Status: Complete.
2. Created an agenda template for monthly workbook reviews. This agenda includes confirmation that the workbook matches the GL and identification of any amount of rounding for the month and award year-to-date. Status: Complete.
3. Added a step to the workbook. In addition to the current process of entering GL information to the workbook, the grant accountant will enter date of confirmation and save a copy of the GL that matches the workbook. Status: complete, effective as of January 2025 activity.
4. Added a step to the department's close checklist. The grant accountant explicitly confirms that Step 3 is done. Status: complete, effective as of January 2025 activity.