Finding Text
Finding 2021-010 – Compliance and Internal Control Over Supporting Documentation – Allowable Costs (Material
Weakness)
Federal Program 14.231 Emergency Solutions Grant
Condition: The Agency did not maintain adequate documentation to support several direct costs charged to federal
awards. In particular, invoices, receipts, or other required supporting documentation were missing or incomplete,
resulting in an inability to substantiate the direct costs claimed for reimbursement.
Criteria: Direct costs charged to federal awards must be supported by proper documentation, such as invoices, purchase
orders, payroll records, and timesheets. These expenses must be allowable, allocable, and reasonable in accordance with
the terms of the federal award and the Agency’s established policies.
Cause: The Agency lacked a consistent process for tracking and retaining documentation for direct costs related to federal
awards, leading to missing or incomplete supporting records for certain expenses.
Effect: The absence of adequate supporting documentation for direct costs exposes the Agency to the risk of
noncompliance with federal regulations, which could result in disallowed costs. Additionally, this could impact the
Agency’s ability to accurately report expenses and potentially jeopardize future funding.
Questioned Costs: $5,317
Recommendation: We recommend the Agency implement procedures to ensure that all direct costs charged to federal
awards are supported by proper documentation and retained in accordance with Uniform Guidance. This includes
regularly reviewing and reconciling supporting records to ensure compliance with federal regulations and organizational
policies.
Management’s Response: See Corrective Action Plan.