Finding Text
Criteria: The Organization is required to establish and maintain effective internal controls over
financial documentation to ensure compliance with federal regulations, as outlined in 2 CFR 200.303
and 2 CFR
200.334 of the Uniform Guidance. These controls are crucial for the accurate management and
reporting of federal funds. Statement of Condition: During our audit, we found that eight out of 60 expenditures tested had
incomplete documentation of the organization’s approval process in accordance with its internal
controls. Additionally, one check stub could not be located.
Cause: The existing internal control processes related to the organization and retrieval of
financial documentation appear to be insufficient, a situation that was exacerbated by staffing
shortages during the period under audit. Addressing these challenges through enhanced processes and
adequate staffing could improve the Organization's ability to provide timely and complete
documentation.
Effect or Potential Effect: The inability to produce essential financial documentation may lead to
compliance challenges with federal funding requirements. Additionally, this increases the risk of
questioned costs, which could have financial implications for the Organization if not rectified.
Recommendation: It is recommended that the Organization implement enhanced procedures for the
systematic maintenance and retrieval of all financial records related to expenditures. This should
include staff training on these protocols to ensure compliance and improve overall internal
controls.
Management’s Response: Management agrees with this finding. Please refer to the Corrective Action
Plan for further details.