Finding Text
2020-002 Support for Expenditures
Material Weakness
This is a repeat finding. The prior-year’s auditing finding number is 2019-002.
Condition: The voucher packages (invoice, purchase requisition, purchase order, check request, etc.) for 2
out of 122 checks selected for testing (excludes checks issued to transfer amounts between Tribal bank
accounts) were not furnished to auditors. 9 out of 120 remaining voucher packages were missing invoice
support.
Criteria: Part D. Cash Disbursement Contol Procedures of the Housing Authority’s policies states that
“The employee designated by the Finance Manager shall initiate each transaction completing a “check
request” form, which shall be presented to the Finance Manager for approval…The Finance Manager
shall review the check requests and attached supporting documentation for completeness and accuracy.
The Finance Manager shall ensure that the vendor’s invoice/billing statement accords with the terms of
the purchase, that the goods have been received and conform to specifications or that the services billed
have been rendered satisfactory…”
Section 300.302 Financial Management of the Office of Management and Budget’s Uniform Guidance
includes the following financial management system requirements:
• Records must be maintained that adequately identify the source and application of funds for
federally funded activities. These records must… be supported by source documentation.
Cause: The executive director has authority to sign checks and therefore, approve of his own expense
reimbursements. The approval process is not a reliable control.
Effect: The lack of support and documentation of approval of these expenditures could cause the Housing
Authority to have inappropriate expenditures being paid.
Questioned Costs: $34,446.
Recommendation: Auditors recommend the governing board require proper documentation on all types of
expenditures and that only members of the board have the authority to sign checks.