Finding Text
Finding 2025-002: Allowable costs and activities – Significant deficiency in internal controls over compliance. ALN 93.575 Child Care and Development Block Grant Criteria: Section 200 of the Code of Federal Regulations requires recipients to implement robust internal controls to reduce the risk of noncompliance with allowable cost principles for all transactions allocated to the grant. Management’s response: See corrective action plan. Condition: During allowable cost and activities other cost testing for the program, 7 out of 40 samples did not include approval of the invoice prior to being allocated to the grant activities. Cause: As of May 31, 2025, the Organization does not have a standard procedure in place to ensure proper controls over allowable costs and activities allocated to federal grants. Effect: Internal controls over the program were not properly designed to reduce the risk of noncompliance. Questioned Costs: None. Recommendation: In order to comply with the Code of Federal Regulations, we recommend the Organization implement a prior approval process of all grant expenditures. In addition, support of approval should be documented and kept on file.