Finding 1080113 (2022-002)

Significant deficiency in internal control over compliance for allowable costs related to adequate documentation. Federal Agency: United States Department of Treasury Program Titles: Coronavirus State and Local Fiscal Recovery FundsFinding 2022-002 (Continued) Questioned Costs None. Repeat Finding Yes. Recommendation We recommend PDA review its accounting policies and practices for compliance with the policy guide provisions of the Code of Federal Regulations. While this policy may have been formulated for materiality purposes, charges to Federal awards require adequate documentation regardless of amount. Assistance Listing Number: 21.027 Pass-Through Entity: King County Award Numbers: 6200091 Award Periods: January 1, 2021 through December 31, 2024 Criteria Internal control requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart E ‐ Cost Principles, Section 200.403, policy guide, require that a non‐Federal entity ensure that cost be adequately documented to be allowable under Federal awards. The accounting practices of the non-Federal entity must be consistent with cost principles per the policy guide and support the accumulation of costs as required by the principles, and must provide for adequate documentation to support costs charged to the Federal award. Condition/Context In our initial sample of transactions for allowability, the PDA said they did not require support for the 14 transactions we had selected under $75 as a policy. They were subsequently able to locate support for all but 5 of these transactions totaling $107. Cause PDA’s accounting policies and practices over allowable costs seemed not properly implemented to ensure compliance with the Uniform Guidance requirements. Effect Some of the transactions were missing adequate documented support. Questioned Costs None. Repeat Finding Yes. Recommendation We recommend PDA review its accounting policies and practices for compliance with the policy guide provisions of the Code of Federal Regulations. While this policy may have been formulated for materiality purposes, charges to Federal awards require adequate documentation regardless of amount.