Finding 1104802 (2024-003)

2024-003 Ineffective Internal Controls over Authorization of ACH Payments of Federal Expenditures (Material Weakness) Federal Agency: U.S. Department of Education Pass through entity: Kansas Department of Education Program Name: Child and Adult Care Food Program Assistance Listing Number: 10.558 Award Period: June 30, 2024 Criteria: Management is responsible for implementing effective internal controls to ensure proper segregation of duties exist over ACH payment authorization of federal expenditure. Condition: During the course of our audit, we noted that ACH payments of federal expenditures did not have proper approval from the board. Cause: The Organization’s policies and procedures lack processes that provide segregation of duties and proper authorization and review of ACH payments of federal expenditures. Effect: The executive director inputs the ACH transactions of federal expenditures into the general ledger, approves transactions and reconcile the bank statements with little to no external monitoring. This increases the likelihood of noncompliance and/or misappropriation of federal funds. Recommendation: We recommend that the board approve the ACH payments of federal expenditures with evidence of approval. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and plans to develop proper policies and procedures for proper review and approval of ACH payments of federal expenditures.