Finding 1201560 (2025-002)

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 Number(s): 21DOT0015AA; 25SDRARG01TKC; 24ECD0504CAT; 24DDS0088RD Award Period: 07/01/2024-06/30/2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Federal regulations require that costs charged to federal awards be allowable, reasonable, and allocable to the program, within the period of performance, and that expenditures be incurred only for activities permitted under the program. Effective internal control over compliance requires that management perform and document a review of invoices prior to payment to ensure compliance with Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance. Condition: During testing of internal controls over compliance for expenditures charged to the program, the auditor noted that 6 selected invoices out of a population of 103 were not properly reviewed in accordance with the entity’s established key control procedures. Specifically, required evidence of review and approval to ensure the expenditure was for an allowable program activity, met allowable cost requirements, and was within the period of performance was not documented prior to payment. Questioned costs: Known - $2,324 Cause: The 6 invoices that did not contain evidence of review and approval pertain to utilities which are set up for direct withdrawal on a monthly basis. Management does not consistently perform or document the required review to verify allowability, eligibility, and period of performance of costs prior to payment based upon the nature of the invoice. Effect: As the invoices were not properly reviewed in accordance with key control procedures, there is an increased risk that unallowable, unsupported, ineligible costs or costs not within the period of performance could be charged to the program without timely detection. This condition reduces assurance that internal control over compliance is operating effectively for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. Repeat Finding: None. Recommendation: We recommend that management reinforce and consistently apply key control procedures requiring documented review and approval of all program invoices prior to payment. Management should ensure that reviews explicitly address allowability, eligibility and within the period of performance under the program and that evidence of such review is retained in accordance with record retention requirements. Views of responsible officials: Management agrees with the finding and will strengthen oversight of invoice review procedures for program expenditures. Management plans to provide additional training to responsible personnel and implement monitoring procedures to ensure that all invoices are properly reviewed, approved, and documented prior to payment.