Finding Text
Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Federal Agency: U.S. Department of the Treasury Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), ALN No. 21.027, Award No. 23-0208-HITC ARPA Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Repeat Finding: No Condition: During our testing of two expenditures, we noted that management was unable to provide supporting documentation that review procedures were performed on invoices before the preparation of disbursement of funds. Questioned Costs: None Context: For both expenditures tested in the population of two, management was not able to provide the required support showing that the invoices were reviewed before preparation of disbursement. Criteria: 2 CFR part 200 section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award including proper authorization and approval for purchases. Cause: There was significant turnover within the finance department of the City and the grants administration process was missing supervision by key personnel. The finding indicates that there should be some process improvements in how grant expenditures are reviewed and approved before disbursement of funds to provide evidence the compliance requirement are being met. Effect: Unallowable costs or activities could be funded by the federal grant. Recommendation: We recommend the City implement procedures to ensure all disbursement of grant funds are reviewed and approved before disbursement as well as increase training efforts on disbursement policy requirements if there is future staffing turnover.