Finding Text
Criteria: As stated above in Finding 2022-001, grant recipients are required to implement financial systems capable of maintaining records that adequately identify the sources of funds for federally assisted activities and the purposes for which the award was used.
Condition: A cash disbursement for the purchase of a vehicle did not include documentation supporting the solicitation of at least three bids or a purchase requisition form as required by the client’s internal controls surrounding their procurement procedures.
This internal control deficiency is considered to be a significant deficiency.
Context: Our procedures included examining general cash disbursements related to the acquisition of property and equipment.
Cause: Due to the abrupt departure of their long-tenured finance director, there was no transfer of knowledge on processing of invoices in compliance with the Association’s policy and procedure manual.
Effect: By not following their own documented internal controls procedures, the Association puts themselves at risk for material misstatement of financial statements or possible misappropriation of Association assets.
Recommendation: We recommend the Association follow its own documented internal controls procedures and ensure that all cash disbursements have proper supporting documentation and proper management approval.
View of Responsible Officials: There is no disagreement with this audit finding.