Finding Text
U.S. Department of Health and Human Services - 93.432 Center for Independent Living
2024-004 Lack of Documented Approval
Criteria: Per 2 CFR §200.303, the entity must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the entity is managing the award in compliance with federal statutes, regulations, and the terms and conditions of the award. Adequate documentation of approvals is a fundamental internal control to ensure expenditures are necessary, allowable, and properly authorized.
Condition: During our testing of expenditures charged to the Centers for Independent Living funded by the U.S. Department of Health and Human Services, we noted that the League did not maintain documented evidence of management approval prior to incurring or paying costs. The transactions reviewed lacked documented authorizations, supervisor sign-offs, or other documentation showing formal approval.
Cause: The lack of documented approval appears to be due to inconsistent application of internal controls and the absence of a standardized process for documenting expenditure authorization for federal programs.
Effect: Without documented approval, there is an increased risk that unallowable or unauthorized expenditures could be charged to the federal award. It also weakens the audit trail and compliance with Uniform Guidance requirements.
Questioned Costs: None noted.
Recommendation: We recommend the League implement and enforce a formal process requiring documented pre-approval of all expenditures charged to federal programs. This may include standardized approval forms or electronic workflows that clearly demonstrate appropriate review and authorization prior to payment.
Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 50.