Finding 1235974 (2022-003)

Approval and Support for Costs Criteria: Uniform Guidance requires that costs be adequately documented and retained to demonstrate that only costs for allowable activities or allowable costs are charged to federal programs. Documentation should also support that expenditures are incurred during the period of availability and prior to submission for reimbursement. In addition, the Organization’s established internal controls require appropriate approval of costs charged to federal programs. Condition: Supporting documentation could not be provided for costs that were charged to the program to support the allowability of costs and activities and whether the charges were incurred during the appropriate period of performance. Out of the 60 transactions tested for this program, adequate supporting documentation could not be provided for 8 transactions. Additionally, 16 of the 60 transactions tested did not have evidence of appropriate approval of the costs. Cause: The Organization did not have adequate internal controls to ensure supporting documentation was maintained and costs charged to federal programs were appropriately reviewed and approved. Effect: Certain costs could not be supported as allowable, incurred during the appropriate period of performance, or incurred prior to submission for reimbursement. Additionally, the lack of documented approval increases the risk that unallowable or inappropriate costs could be charged to the federal program without appropriate management review. Questioned Costs: Less than $25,000 Recommendations: We recommend that the Organization continue to follow its established internal controls and provide additional training to personnel responsible for processing and approving costs charged to federal programs. The Organization should ensure that adequate supporting documentation is maintained and that all costs are appropriately reviewed and approved before being charged to federal programs. Management's View: Management agrees with this finding.