Finding Text
Criteria: All costs must be adequately documented and approved prior to payment. Condition: Certain purchases were not supported by adequate documentation and certain other expenses were not approved prior to payment. Context: In a sample of 22 disbursements selected at random, there was a lack of documentation for 5 items and lack of documentation of approval for nearly all of the items. Cause: Management did not have appropriate financial policies and procedures. Effect: Lack of appropriate internal controls could jeopardize the Organization’s ability to secure federal funds in the future. Recommendation: We recommend the Organization improve internal controls over purchases and other costs to ensure there is adequate documentation and approval prior to payment. Views of responsible officials: We started working with an accountant in fiscal year 2024 who required that all invoices be approved prior to payment. The process aligned with our board-approved purchase amounts, which required one approval for purchases under $10,000 and two approvals for purchases equal to $10,000 or more. Approvals were recorded by changing the document’s file name when gathering the documentation for the audit, file names were changed in order to streamline the auditor’s ability to locate the supporting documentation. We now recognize that the auditors must see the approvals, and we will no longer update the file names during the preparation for the audit. Although we have a consistent approval process, we will explore other ways to document the approvals to satisfy the auditor’s requirements. Repeat finding: Repeat of finding 2023-004. Questioned costs: None.