Finding Text
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (Eviction Rental Assistance Program 2.0) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP0002 2022 Pass-Through Agency: Washington State Department of Commerce Pass-Through Number(s): 21-4619C-104 Award Period: 10/1/2021 - 6/30/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance Criteria or specific requirement: Uniform Guidance requires that costs charged to federal awards be allowable, adequately documented, and supported by appropriate authorization (2 CFR §§200.403 and 200.403(g)). In addition, recipients must establish and maintain effective internal control over federal awards to provide reasonable assurance that federal awards are managed in compliance with applicable statutes, regulations, and the terms and conditions of the federal award (2 CFR §200.303). (This finding is reported as a significant deficiency because, although approval and documentation deficiencies were identified and questioned costs resulted, the errors were not pervasive and did not result in material noncompliance with the federal program.) Condition: During testing of general disbursements charged to federal awards, we identified instances in which required controls over authorization and documentation were not followed. Specifically, of the 40 disbursement transactions tested, 7 transactions lacked evidence of appropriate approval, and 1 transaction lacked sufficient receipt or invoice support. These deficiencies resulted in questioned costs totaling $1,465.44. Context: The population consisted of general disbursement transactions charged to federal awards during the audit period. A judgmental sample of 40 disbursement transactions was selected for testing. Of the 40 transactions tested, 7 transactions lacked evidence of appropriate approval and 1 transaction lacked sufficient receipt or invoice support, resulting in questioned costs totaling $1,465.44. No exceptions were expected based on the auditee’s established policies and procedures requiring approval and documentation of expenditures. Cause: Although the auditee has established procedures related to the approval and documentation of disbursements, these procedures were not consistently performed or documented. Management did not consistently ensure that required approvals and supporting documentation were obtained and retained prior to charging costs to federal awards. Effect: As a result of these control deficiencies, certain costs charged to federal awards were not supported by adequate approval or documentation, resulting in questioned costs of $1,465.44. In addition, inconsistent execution of disbursement controls increases the risk that unallowable or unsupported costs may be charged to federal awards and not detected on a timely basis. Repeat Finding: Yes. Recommendation: We recommend that management reinforce the consistent execution and documentation of existing disbursement approval and documentation procedures. This should include ensuring that all expenditures charged to federal awards are appropriately approved and supported by sufficient documentation prior to payment, and that management periodically monitors compliance with these procedures to confirm they are operating as designed. Views of responsible officials: Management agrees with the finding and has prepared a Corrective Action Plan.