Finding Text
Condition During our current year testing of expenditures related to the Centers for Independent Living Program, we noted 3 instances from a sample of 40 expenditures that lacked evidence of management approval. Questioned Costs N/A Criteria Management is responsible for establishing and maintaining an effective system of internal control over financial reporting. Proper approval of expenditures is a key aspect of an effective system of internal control over financial reporting. Cause The absence of approval documentation appears to be due to management oversight and lack of enforcement of established control procedures. Effect of Condition Failure to consistently obtain and document management approval increases the risk of unauthorized, inappropriate, or fraudulent expenditures, and weakens the Organization’s overall internal control framework. Recommendation We recommend that the Board and management strengthen internal controls over expenditures by ensuring that all disbursements are properly reviewed and approved by authorized personnel prior to payment. Procedures should include clear documentation of such approvals (e.g., initials, signatures, or electronic authorization) and regular monitoring to ensure compliance.