Finding Text
Program Information: See the Corrective Action Plan for chart/table Criteria or specific requirement: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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). The cost principles in 2 CFR part 200, subpart E (Cost Principles), prescribe the cost accounting requirements associated with the administration of Federal awards by: a. States, local governments, and Indian tribes b. Institutions of higher education (IHEs) c. Nonprofit organizations Except where otherwise authorized by statute, cost must meet the following general criteria in order to be allowable under Federal awards; 4. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. 7. Be adequately documented. AL #21.027 Recipients may use Fund payments for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021 (codified as 42 U.S.C. § 802 and 42 U.S.C. § 803 respectively), Treasury’s Interim Final Rule and Final Rule at 31 CFR §§ 35.7 and 35.8, and FAQs at (https://home.treasury.gov/system/files/136/SLFRPFAQ.pdf). Condition/Context: During testing, the following was noted: AL #93.441 • 18 of 52 payroll samples did not have payrate support provided. • 2 of 52 payroll samples did not have a timesheet provided. • 8 of 52 payroll samples were missing a required signature on the payrate support provided. AL #93.600 • 1 of 4 Individually Important Items (IIIs) had no journal entry approval and no additional payroll support provided for testing. • 6 of 53 payroll samples had no support provided. • 47 of 53 payroll samples had no payrate support and timesheets provided. AL #21.027 • 1 of 1 IIIs had no documentation provided and the journal entry was not reviewed or approved prior to posting. • 11 of 60 samples did not have a check or enrollment information provided to support the Tribal member economic assistance payments. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: There were not sufficient controls implemented to appropriately ensure that disbursements are properly reviewed, supported, and approved prior to processing. A lack of centralized documentation, inconsistent procedures, and limited oversight contributed to the deficiencies noted. Effect: Disbursement transactions are being processed without proper documentation, which increases the risk of unallowable or unsupported costs being charged to federal programs. Questioned Costs: AL #93.441 – Known – $10,804 AL #93.600 – Known – $44,001 AL #21.027 – Known – $586,462 Repeat Finding: Yes – 2021-011. Recommendation: We recommend the Department update its policies to mention the retention aspect of disbursement processing and follow their written policies. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.