Finding Text
Criteria: Under the OMB Compliance Supplement Matrix, Requirement N - Special Tests & Provisions applies to ALN 97.036. Entities must maintain records that accurately track disaster-related expenditures in appropriate accounts to ensure proper reporting, transparency, and auditability. Tracking expenditures in the designated GL account is part of the auditee's internal control system for FEMA Public Assistance documentation. Condition: For 2 of 25 items tested (8%), disaster‑related expenditures were not recorded in the designated general ledger (GL) account used to track FEMA Public Assistance costs. Instead, they were recorded in other GL accounts. Cause: Expenditures were miscoded to incorrect GL accounts due to breakdowns in account‑coding controls during processing. Effect: Disaster‑related expenditures may not be fully or accurately captured in the account used for grant tracking, reducing the effectiveness of internal controls supporting reporting, project reconciliation, and documentation completeness. The financial impact is unknown, but the condition increases the risk of incomplete tracking of project expenditures. Context: Population: 1,443 expenditures Sample: 25 Exceptions: 2 (8%) Sample was not statistically valid Questioned Costs: None. Recommendation: We recommend management: Strengthen GL coding controls for disaster‑related activity Implement a secondary review over expenditure coding Periodically reconcile disaster expenditures across all GL accounts to ensure completeness and proper classification in the FEMA‑designated tracking account Views of Responsible Officials: Management agrees with the finding.