Finding Text
Identification of the federal program: 97.036 – Disaster Grants – Public Assistance
Noncompliance and material weakness in internal controls over allowable activities, allowable costs and period of
performance.
Criteria:
Procedures should be implemented to ensure all materials taken from inventory and charged to the grant are
appropriately tracked and supporting documentation is maintained. In addition, internal controls should be present
to ensure there is appropriate review and approval of charges made to the grant.
Condition:
Materials charged to the grant were not adequately tracked and internal controls were not in place to ensure only
items used on the project were charged to the grant.
Cause:
The Cooperative did not have a structured process for tracking, reviewing, and approving materials removed from
inventory, leading to gaps in oversight and control.
Effect:
Without proper tracking and approval procedures, the Cooperative risks charging unallowable or unsupported costs
to the grant.
Questioned Costs:
$137,075
Recommendations:
The Cooperative should implement and follow a proper materials tracking system that ensures all materials taken
from inventory are properly documented and approved for use.
Views of responsible officials:
We used our standard process for charging out materials and did a physical inventory count. We do believe that we
have properly charged this project for the appropriate materials used. However, to avoid this in the future, we are
implementing a new process for physically setting aside the materials and having a second sign-off on material
sheets.