Finding Text
2023-001 Inaccurate Recording of Expenditures
Assistance Listing Number:
16.575 - United States Department of Justice Injury Prevention and Control
Federal Agency:
United States Department of Justice
Federal Award Identification:
Unknown
Type of Finding:
Material Weakness
Compliance Requirement:
Allowable Cost/Cost Principle
Criteria:
Per 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), federal expenditures must be recorded in the appropriate accounting period to ensure accurate financial reporting and compliance with federal grant requirements. Specifically, costs must be incurred during the period in which the associated funds are to be expended.
Condition:
During the audit, we tested a sample of 60 expenditure transactions and identified that 7 samples were recorded in the incorrect accounting period as the checks were issued but not yet cashed by the payees. These expenditures were improperly included as part of the federal grant expenditures.
Cause of Condition:
The incorrect recording of expenditures and monitoring of the Agency’s accounting procedures and internal controls. There may also be insufficient training provided to the accounting staff on the proper timing of expense recognition and documentation requirements under Uniform Guidance.
Potential Effect of Condition:
The misstatement of expenditures due to incorrect period recording could result in noncompliance with federal grant requirements, potentially leading to questioned costs or the need to repay grant funds.
Questioned Cost:
$5,300
Recommendation:
We recommend that the Agency revise its procedures for recording expenditures to ensure compliance with Uniform Guidance, particularly with regard to the timing of expense recognition. The Agency should implement controls that prevent expenditure from being recorded before the related checks are cashed. The Agency should provide additional training to accounting staff on these requirements and consider implementing periodic internal reviews to ensure ongoing compliance.
Views of Responsible
Official:
Management agrees with the finding and will implement corrective action.