Finding Text
2021-003 Allowable Costs/Cost Principles – Material Weakness in Internal Control over Compliance Identification of federal programs: 14.862 Indian Community Development Block Grant Program Criteria: Title 2 U.S. Code Part 200.403(g) requires that for costs charged to a federal program to be allowable, they must be adequately documented. Condition: Payroll related costs charged to the program did not have Personnel Action Forms to document the rate of pay for the employee in accordance with the Council’s own financial policies and procedures. Cause: The Council was adjusting to challenges created by the COVID-19 pandemic. Effect or potential effect: Although charges were still approved and supported, not following established financial policies and procedures increases the risk that internal control failures, questioned costs and noncompliance could arise in the future over major federal programs. Questioned Costs: None Context: During our sample testing for allowable costs of the 14.862 Indian Community Development Block Grant Program major program, we noted that the 19 payroll samples we selected did not have their approved payrate support in the form of a Personnel Action Form as required by the Council’s own financial policies and procedures. Identification of Repeat Finding: This is a repeat finding, previously identified as Finding 2020-003. However, it has been elevated to a material weakness in the current year due as a material amount of payroll expenditures were charged to the major program. Recommendations: We recommend the Council review its financial policies and procedures and implement and/or revise accordingly to ensure they conform to both uniform guidance and internal policies and procedures to satisfy adequate internal controls. Views of Responsible Officials: Management agrees with this finding. See Corrective Action Plan. See Corrective Action Plan.