Finding Text
Significant Deficiency: Maintain Documentation on Approval of Invoices Related to Federal Expenditures
Condition: During our review of controls over expenditures of federal awards, we noted that the program managers review the billing reports, including supporting documentation (vendor invoices) for allowability under the grant agreements and the Uniform Guidance; however, support of their review of the expenditures reported on the SEFA that are unbilled at year-end is not maintained by the Organization.
Criteria: The Organization’s internal control system should be properly designed to ensure that allowable costs charged to grants are receiving the appropriate level of oversight and review.
Cause: The Organization’s internal control policies require approval of all invoices prior to payment; however, support for these approvals was not maintained by the Organization outside of the program manager’s approval at the time of billing.
Effect: Out of a sample of 37 expenditures, we noted 6 did not have support of the required approval by the program manager. Statistical sampling was not used in making sample selections. Our testing did not identify any questioned costs as a result of this deficiency in control.
Recommendation: We recommend management implement a process to ensure that documentation on the approval of expenditures be maintained and that the review by the program manager occurs in a timely manner, not just at the time the expenditures are billed to the grantors.