Finding Text
Criteria: 2 CFR 200.303 Internal Controls (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR Section 200.400(a) states “The recipient and subrecipient are responsible for the efficient and effective administration of the Federal award through sound management practices.” Condition: Invoices were not approved for 14 out of 60 (23%) transactions selected for testing. Purchase orders were not included for 5 out of 60 (8%) transactions. 22 out of 60 (37%) of the transactions selected for testing did not have any documentation to support the amounts charged to the federal awards. 5 transactions did not provide detailed receipts to show whether tax was paid. Cause: The entity did not follow procedures which are outlined in the Accounting Manual including the requirement to use purchase orders, obtain Executive Director approval, and retain supporting documentation for all expenses. Effect: Lack of proper approvals and documentation could result in unallowable costs being charged to the federal award, possibly resulting in the entity having to return funds to the federal agency or pass-through entity. This may also lead to reduction of future federal funding due to noncompliance. Questioned Costs: $231,725 Repeat Finding: No Recommendation: We recommend that management review the policies and procedures in place, make any necessary changes, and communicate these to all staff at the WIB.