Core Issue: Expenses lack proper independent review and approval before payment, increasing risk of unauthorized transactions.
Impacted Requirements: Internal controls over expense authorization are not being followed, violating established safeguarding policies.
Recommended Follow-Up: Implement written policies for independent approval of all expenses by September 1, 2025.
Finding Text
Expenses. Criteria – Internal controls over safeguarding assets constitute a process, effected by an entity’s governing body, management and other personnel designated to provide reasonable assurance regarding prevention or timely detection of unauthorized transactions and safeguarding assets from error or misappropriation. Such processes include establishing policies addressing proper authorization of the expense. Expenses should be approved by the Local Workforce Development Board prior to funds being disbursed. Condition – We noted the following regarding the Local Workforce Development Area’s expenses related to the WIOA program: 1) Expenses to the Employer of Record for payroll do not include documentation of review and approval prior to payment being made for 3 of 26 transactions tested. 2) Reimbursements to the Executive Director and expenses for credit card purchases do not include documentation of an independent review prior to payment being made for 3 of 26 transactions tested. Cause – The Local Workforce Development Area’s policies and procedures do not require all expenses be approved by an independent person prior to payment. Effect – Lack of policies and procedures requiring approval could result in unauthorized transactions and the opportunity for misappropriation. Recommendation – The Local Workforce Development Area should adopt written policies and procedures requiring independent approval of all expenses prior to payment being made. Response and Corrective Action Planned – We will review policies and procedures for expenses to ensure that all payments have an evidenced independent review prior to payment. We plan to implement these changes September 1, 2025. Conclusion – Response accepted.
Corrective Action Plan
We will review policies and procedures for expenses to ensure that all payments have an evidenced independent review prior to payment.
Categories
Procurement, Suspension & DebarmentCash ManagementEquipment & Real Property ManagementInternal Control / Segregation of Duties