Finding Text
Finding type: Significant deficiency in internal control over financial reporting and significant deficiency in internal control over compliance. Criteria and Condition: Internal controls should include documented review and approval of expenditures to ensure that expenses are accurate, properly authorized, and compliant with organizational policies and grant requirements. During our testing, we noted some expenditures (4 of 25 tested) were processed and recorded without documented evidence of review or approval by management. Cause: The Organization has not established or enforced procedures requiring consistent documentation of review and approval for expenditures. Effect: Without documented review, there is an increased risk of errors, unauthorized spending, or noncompliance with grant terms going undetected. This weakens the Organization's control environment and may compromise financial reporting reliability. Recommendation: We recommend the Organization consistently follow procedures requiring documented review and approval of all expenditures, whether through manual sign off or system based electronic approvals, to strengthen internal controls and accountability. Response: Management will document the review and approval of all expenditures.