Type of Finding: Significant Deficiency in Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year:...
Type of Finding: Significant Deficiency in Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: The Organization, as part of their stated controls, require that expenditures must be approved by the ED, CFO, or program directors / managers. In addition, § 200.303(a) requires the Organization to 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 statutes, regulations, and the terms and conditions of the Federal award.
Condition: During our testing, it was noted that 12 of 60 samples did not include sufficient records to substantiate approval of the disbursement.
Questioned costs: None.
Context: A sample of 60 was made from a population of over 250 disbursements charged to the major program. Of the 60 sampled costs, 12 did not have sufficient records to substantiate adequate approval.
Cause: Approvals are not maintained for ACH transactions.
Effect: Without adequate controls in place to ensure costs are reasonable and intended for the program charged, the Organization could incorrectly charge expenditures to the federal program, report fraudulent expenditures, or not request appropriate reimbursement that the Organization is entitled to under the terms of the grant.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-003.
Recommendation: CLA recommends that additional emphasis of documentary evidence of approvals be made, and such evidence should be obtained and retained by the Organization as proof of oversight of expenditure of federal funds. CLA would also recommend the use of an AP voucher, or similar, for each type of disbursement that leaves the Organization (check, ACH, EFT, credit card, etc.) to improve documentary evidence that costs are being reviewed and approved for appropriateness.
Views of responsible officials: There is no disagreement with the audit finding.
Action taken in response to finding: Previous corrective actions were completed in April 2024 upon receipt of our FY 2022 Audit from CLA. We believe these corrective actions would have captured most, if not all, of the findings if they were in place for the entire FY23 period. That said we have further reviewed and expanded our internal controls and training for all staff on documenting evidence of approvals, including obtaining and retaining necessary documentation and proof of expenditure oversight for federal funds to ensure there is adequate evidence that costs are being reviewed and approved for appropriateness. As noted above, we have added a procurement approval form and a standardized process for approval signature, quotes, sole source evidence and price analyses. We are also investigating an AP voucher process through our existing accounting software.
Name(s) of the contact person(s) responsible for corrective action: Gary Slater
Planned completion date for corrective action plan: 10/1/2024