Finding Text
Finding 2023-003: Allowable Costs
Information on the Federal Program: 97.024 - Emergency Food and Shelter National Board
Program
Type of Finding: Significant Deficiency in Internal Control over Compliance and Non-compliance
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) 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: During our testing over credit cards, we noted that while there is a documented review and
approval process in place over employee charges, there is no evidence to support the date in which
the review was performed. Charges on the credit cards include expenditures that are reimbursed on
federally funded awards.
Cause: SAMU does not have a formal policy in place with respect to credit card receipt retention or
review and approval over charges. As such, SAMU did not have effective internal controls in place to
ensure that approvals were performed and documented as being performed in a timely manner.Effect or Potential Effect: There is the potential that credit card charges allocated to the Federal
award were not properly reviewed in a timely manner, and could have been improperly charged or
charged in the incorrect period, thereby creating a potential for being reimbursed for unallowable costs.
Questioned Costs: None.
Context: 372 out of 372 samples selected for testing did not have adequate documented review and
approval. The sample is deemed representative of the population.
Identification of a Repeat Finding: Not applicable.
Recommendation: We recommend that SAMU implement a formal credit card policy. This policy
should require that management formally review and approve employee credit card transactions and
obtain appropriate supporting evidence for the charges on a monthly basis.