Finding 1145638 (2024-001)

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Requirement
P
Questioned Costs
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Year
2024
Accepted
2025-06-30

AI Summary

  • Core Issue: The purchase order policy was not consistently followed, leading to insufficient documentation for expense approvals.
  • Impacted Requirements: Lack of proper documentation increases the risk of unauthorized purchases, violating management's authorization protocols.
  • Recommended Follow-Up: Implement and consistently follow a revised purchase order policy with documented approvals from the program manager or Executive Director.

Finding Text

Material Weakness Condition: During the majority of the year ended September 30, 2024, the Organization’s purchase order policy was not consistently followed. While there appeared to be a proper segregation of duties and proper review and approval of expenses prior to purchase, the process was not consistently followed, and evidence of review and approval was not always available. Criteria and Cause: The purchase order policy is designed to prevent purchases that are not authorized by management. Our consideration of the Organization’s internal control system disclosed that there was not sufficient documentation for review and approval of expenses prior to purchase. Effect: The lack of proper documentation of review and approval of expenses increases the risk that purchases could be made without authorization by management. Recommendation: A purchase order policy should be in place and consistently followed that includes documented authorization by the program manager or the Executive Director to ensure that all expenses have documentation of review and approval prior to purchase. Views of responsible officials and planned corrective actions: In July 2024, the contracted community action agency assisted with drafting a new purchase order policy and began training on this to implement one department at a time. The new policy requires the use of a payment authorization form authorized by the program manager or the Executive Director to ensure that all expenses have documentation of review and approval prior to purchase.

Categories

Internal Control / Segregation of Duties Procurement, Suspension & Debarment Material Weakness

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
10.558 Child and Adult Care Food Program $1.66M
14.231 Emergency Solutions Grant Program $96,473
93.569 Community Services Block Grant $51,348
10.420 Rural Self-Help Housing Technical Assistance $50,000
14.239 Home Investment Partnerships Program $45,726