Finding Text
Type of Finding: Significant Deficiency in Compliance and Internal Control over Compliance Federal Agency: Department of Veterans Affairs Federal Program Name: Veterans Affairs Supportive Services for Veteran Families Program Assistance Listing Number: 64.033 Federal Award Identification Number and Year: 20-WA-146-25; 20-WA-146-LT Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 20-WA-146-25: October 1, 2023 – September 30, 2026; 20-WA-146-LT: August 19, 2022 – September 30, 2026 Criteria or specific requirement: 2 CFR 200.303 requires recipients of federal funds to "establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statues, regulations, and terms and conditions of the Federal award." Condition: During testing of cash management and indirect costs, all 5 samples of reimbursement request invoices tested from the King County Division lacked evidence of approval by the Finance Director. The 3 additional samples tested from another Division had evidence of review on the invoices. Questioned costs: None. Context: Each Division implements different procedures and controls related to compliance. For the King County Division, the Finance Director was tasked with reviewing the monthly reimbursement request and the corresponding indirect cost calculations via her review of monthly financials. However, that review was not documented during the year therefore there was not any key control in place. The Director of Federal Compliance was the only one who prepares and request the drawdowns without any oversight; however, this did not result in noncompliance. Cause: There are different processes implemented across the various Divisions, which results in inconsistent application of compliance requirements and controls. Effect: Increased possibility of requesting reimbursement for costs that are unallowable to the program, and for misapplying the indirect cost rate due to human error. Repeat Finding: 2024-003 Recommendation: CLA recommends applying a consistent review process of reimbursement requests across all programs and Divisions, to the extent possible, to reduce the likelihood of missed application of controls in regard to cash management and indirect cost application. Views of responsible officials: There is no disagreement with the audit finding.