Finding 1151325 (2024-002)

Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal awards that provides assurance that the entity is managing the federal awards in compliance with federal statues, regulation and conditions of the federal awards. Condition and Context: Accounting tasks such as review and approval of cost reimbursements play a key role in proving the accuracy of accounting data and information included in SEFA. During the audit, we noted various incidences in which required second approvals for cost reimbursements were not completed in accordance with the Organization’s approval procedures. Questioned Costs: None noted Effect: Costs could be charged to federal programs which are unallowed due to lack of review. Cause: The Organization experienced significant turnover in the accounting department during 2024. As a result, well-defined accounting policies and procedures have not been established and many review and approval policies and procedures have not been consistently or continuously maintained. Recommendation: We recommend that the Organization implement enhanced internal controls over the review and approval of cost reimbursement forms prior to submission, in order to prevent errors and ensure accuracy. The responsibility for reviewing and approving these forms should be clearly segregated from the individual responsible for recording the related journal entries, to maintain proper separation of duties and strengthen the overall control environment.