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.