Finding Text
Finding 2023-006: Significant Deficiency – Allowable Costs/Cost Principles
Program: Indian Schools Student Transportation
Assistance Listing Number: 15.044
Federal Agency: U.S. Department of the Interior
Federal Award Identification Number: N/A
Federal Award Year: June 30, 2023
Criteria: The Uniform Guidance requires that an entity establish a system of properly-functioning internal controls and that a review and approval of all expenditures occurs and that appropriate documentation of that review and approval is maintained.
Condition: Documentation of the review and approval of certain expenditures was unable to be located.
Questioned Costs: None noted.
Context: The documentation of the review and approval of expenditures was not able to be located for two of the six expenditures selected for testing. There were a total of 23 expenditures charged to the program during fiscal year 2023. The sample was not considered statistically valid.
Effect: When expenditures are not properly reviewed and approved, unallowable costs could be charged to federal programs.
Cause: The Club has not implemented an effective system of internal controls over maintaining documentation of the review and approval of program expenditures.
Recommendation: It is recommended that the Club ensures that internal controls are adequately maintained to ensure that the review and approval of program expenditures occurs and that the documentation of that review and approval is appropriately maintained.
Management’s Response: The Club agrees with this finding and has established procedures to ensure that all required signatures are obtained before posting intercompany expenses for transportation. The Assistant Finance Director receives the monthly invoices from the Bus Department and forwards them to the Cherokee Central Schools Finance Director for approval before completing the monthly posting.