Finding 1055857 (2023-002)

Condition: The internal controls over the federal expense approval process were not operating properly. As a result, we were unable to review approval for a selection of expenses claimed as part of the Crime Victim Assistance program. Documentation could not be provided for 1 of the 40 expenses selected for testing. Supporting documentation showing approval of the expenditure could not be provided for an additional 2 of the 40 expenses selected for testing. Criteria: The Organization’s policy is to have a finance expenditure form or expense form signed by the Director of Finance and/or VP of Finance for all purchases. For expenditures not paid by check, such as recurring payments and credit card, it is expected supporting documentation signed by the VP of Finance be retained to document expense approval. Proper functioning internal controls would result in the Organization having consistent control procedures in place for expense approval. Cause: The system of controls over the Crime Victim Assistance program did not operate properly to allow for the Organization to provide supporting documentation for 1 of 40 items selected for testing as part of the allowable cost testwork performed. It also did not operated properly to allow the Organization to provide evidence of the approval of expenditure for 2 of 40 items selected for testing as part of the allowable cost testwork performed. Effect: The Organization was unable to provide documentation to verify these federal expenditures were approved. Recommendation: The District's internal control system should be modified to document approval of all federal expenditures.