Finding Text
Finding 2023-002: Disbursement Approval and Documentation
Information on the Federal Program: 93.471
Criteria or Specific Requirement: CFR 200.303 specifies that the Organization must establish and
maintain effective internal control over the Federal award that provides reasonable assurance that the
non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations,
and the terms and conditions of the Federal award. These internal controls should be in compliance
with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework”, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: The Organization has certain items which are set to auto-pay (i.e. accounting services,
insurance and retirement payments), and as a result no payment authorization is available. In addition
we noted several instances where the contract was meant to serve as payment authorization (there
was no specific authorization of disbursement).
Cause: The Organization has not required a separate authorization for payment of certain items that
are either on auto-pay or are paid based on contracts. The Organization has a payables processing
system that could maintain approval and payment documentation as well as the associated supporting
documents, but is not using it to process some payments.Effect or Potential Effect: It is critical to maintain payment authorization support to avoid
unauthorized payments, questioned costs and other potential issues.
Questioned Costs: None noted.
Context: Although none of the items noted without authorization were charged to the major program,
our testwork consisted of statistical sampling as well as substantive testwork over various samples of
expenditures, and were determined to be representative of the population for the fiscal year under
audit.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: We recommend that the Organization ensure that documentation of authorization
is documented and available.