Finding Text
U.S. Department of Commerce Pass-through Entity: South Carolina Department of Commerce Program Name: COVID19 Community Development Block Grant Federal Assistance Listing Number: 14.218 Significant Deficiency – Activities Allowed and Allowable Costs Finding 2023-002 Criteria: Invoices should be reviewed and approved prior to payment to ensure allowability in accordance with the grant agreement and accuracy and classification of expenses recorded. Condition: The Organization did not properly maintain records that invoices were reviewed and approved prior to payment. Cause: The Organization experienced significant turnover in the finance department during the year, and therefore, the Organization was unable to implement adequate internal controls over the activities allowed and allowable costs of the grant. Effect: Invoices could be paid that are not allowed by the grant, are for the incorrect amount, or expenses are not classified or recorded properly in the general ledger. Questioned Costs: No questioned costs reported. Context: There were 18 instances out of 40 samples tested where the invoice was not reviewed and approved prior to payment. However, reimbursement requests which included the invoices of grant related expenses submitted for reimbursement were reviewed and approved, indicating that there was a control over the allowability of the expenses for the grant. Auditor’s recommendation: All invoices should be reviewed and approved prior to payment and verifiable documentation of the review and approval should be maintained. Views of Responsible Officials: See Corrective Action Plan.