Finding Text
Finding - Due to District control deficiencies, the District made a duplicate payment totaling $120,918 for construction services from ES Fund proceeds, resulting in questioned costs of that amount. Criteria -The ES Fund provides funding to prevent, prepare for, and respond to the COVID-19 pandemic, and the District must comply with the Uniform Guidance in Title 2, Code of Federal Regulations (CFR), Part 200 in their operation of the program. Title 2, Section 200.1, CFR, defines improper payments as a payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements, including any duplicate payment. Condition - During our audit of construction services discussed in Finding No. 2024-005, we identified a duplicate payment of $120,918 charged to the ES Fund. Our audit procedures determined that both the original payment of $120,918, made in January 2024 and the subsequent duplicate payment made in March 2024 were based on the same invoice for construction services. Since the latter payment was improper, $120,918 represents questioned costs to the program. Although we requested, District records were not provided to demonstrate that the District was aware of the duplicate payment, any District efforts to obtain reimbursement for the duplicate payment, or that the vendor had contacted the District about the duplicate payment. Cause - District personnel indicated that turnover and reassignments of duties during the year contributed to inadvertently processing two accounts payable checks for the same invoice. Also, District controls had not been established to require knowledgeable staff to independently review and approve invoices for payment of ES Fund expenditures to ensure payments are reasonable and necessary. Further, District controls were not sufficient to detect duplicate payments. Effect - The duplicate payment of $120,918 resulted in an unnecessary expenditure of ES Fund moneys and the District did not comply with Federal regulations that require all Federal expenditures to represent reasonable and necessary charges. Consequently, the ES Fund incurred questioned costs totaling $120,918. We expanded our audit procedures to determine whether other significant duplicate payments occurred from ES Fund resources and did not identify similar payments. Recommendation - District procedures should be enhanced to prevent duplicate payments from Federal programs. Such procedures should require knowledgeable staff to independently review and approve invoices for payment of ES Fund expenditures to ensure payments are reasonable and necessary. District procedures should also be enhanced to detect and promptly resolve duplicate payments when they do occur. In addition, the District should seek reimbursement of the duplicate payment from the construction service provider and consult with the grantor agency to remedy the questioned costs of $120,918. District Response - The District is in the process of reviewing and updating controls to ensure payments for construction services are made timely and consistently. The District is requesting a refund from the vendor.