Finding Text
Federal Agency: United States Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Transportation, Department of Social Services, Department of Mental Health and Addiction Services, and Department of Developmental Services Pass-Through Numbers: 21DOT0015AA; 25SDRARG01TKC; 24ECD0504CAT; 24DDS0088RD Award Period: 07/01/2024-06/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or specific requirement: Federal regulations require that expenditures charged to federal awards be supported by adequate documentation and that such costs be allowable, reasonable, allocable to the program and within the period of performance. Condition: During testing of expenditures charged to the program, the auditor selected invoices for testing to determine compliance with Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance. Management was unable to provide support 7 of the 103 items selected for testing. As a result, the auditor was unable to verify that the expenditure was allowable, properly supported, incurred for an eligible program activity, and within the period of performance. Questioned costs: Known - $3,265 Context: Through testing performed, it was identified that 7 cash disbursements of the 103 selected for testing between Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance did not have proper invoice or internal support for the cost incurred. Cause: The entity did not have adequate controls in place to ensure that all invoices and supporting documentation for expenditures are retained and readily available for audit and compliance purposes. Effect: As the invoice and supporting documentation were not provided, the auditor was unable to conclude that the expenditure complied with Activities Allowed or Unallowed, Allowable Costs/Cost Principles or Period of Performance. This condition increases the risk that unsupported, unallowable, or ineligible costs could be charged to the program and that noncompliance may occur without timely detection. Repeat Finding: None. Recommendation: We recommend that management strengthen internal controls over compliance by implementing procedures to ensure that all expenditures are supported by complete and accurate documentation that is retained in accordance with federal record retention requirements. Management should also periodically review documentation for completeness to ensure that expenditures charged can be substantiated and verified as allowable, related to eligible activities, and within the period of performance. Views of responsible officials: Management agrees with the finding and will enhance documentation retention procedures for expenditures. Management plans to review existing records, reinforce documentation requirements with responsible staff, and implement controls to ensure that all future expenditures are supported by complete and readily accessible documentation.