Finding Text
Accounts payable testing and internal controls. Programs: Title I grants to local educational agencies, ALN #84.010 COVID-19 – Elementary & Secondary School Emergency Relief I and II, ALN #84.425D COVID-19 – Elementary & Secondary School Emergency Relief III ARP (ESSER) ALN #84.425U Compliance Requirement: Allowable Costs/Cost Principles Criteria: An effective system of internal control is the responsibility of management. Management should establish an internal control system that ensures strong financial accountability and safeguarding of assets. This includes maintenance of accurate accounting records and following the proper purchasing procedures. Condition: During our testing of forty-four (44) invoices, we noted the following exceptions: 1. Four (4) in the sample where a 2nd quote could not be provided. 2. Three (3) in the sample where evidence could not be provided to show items were added to the capital asset inventory listing. 3. One (1) instance where the claim documentation was not maintained and could not be provided. Context: Internal control procedures were tested for accounts payable in the major federal funds. Cause: The district did not properly ensure that the accounts payable internal control system was being followed for all transactions including all purchasing procedures required by the state. Effect: Without a proper internal control system being in place to ensure accurate accounting records, there is an increased risk that the financial statements could be misstated. Questioned Cost: None Recommendation: District should implement policies and procedures to establish an internal control system that will require accountability with regard to accounts payable and purchasing. This will ensure the proper safeguarding of assets and accurate accounting records. Response: Please refer to the Auditee’s Corrective Action Plan beginning on page 88.