Finding Text
Finding 2025-008 – Allowable Costs/Cost Principles: Insufficient Documentation of Expenditure Review and Approval – Significant Deficiency in Internal Control Over Compliance; Agencies – Department of Education; Assistance Listing Numbers (ALN) - 84.356A; Program Name - Alaska Native Educational Programs; Award Year / Award Number – FY 2025, 2024, 2023 / Award #S356A220066; Criteria or Specific Requirement – 2 CFR 200.303 requires recipients of federal awards to establish and maintain effective internal control over federal awards to provide reasonable assurance that awards are managed in compliance with federal statutes, regulations, and the terms and conditions of the award. In addition, 2 CFR 200.403 requires costs charged to federal awards to be allowable, adequately documented, and consistent with applicable federal requirements and the terms and conditions of the award.; Condition – APU did not retain evidence that the required review and approval was performed over credit card-related transactions before the expenditures were charged to the federal award. There are other mitigating controls relating to the payment of expenses, including credit cards.; Cause – For credit card-related nonpayroll expenditures, management did not have sufficient procedures to ensure required reviews and approvals were consistently documented and retained before expenditures were charged to the federal award.; Effect or Potential Effect – Without documented approval, errors, unallowable costs, or noncompliance with federal program requirements may occur and not be detected timely.; Questioned Costs - None reported.; Context – The population selected for testing consisted of 41 nonpayroll expenditure transactions totaling $101,810, with a total population of nonpayroll expenses of $366,354. We identified exceptions in 9 transactions totaling $7,537, all of which related to credit card transactions.; Repeat Finding – This is not a repeat finding.; Recommendation - Management should strengthen controls over nonpayroll expenditures by ensuring all required reviews and approvals are documented and retained.; Views of Responsible Officials – Management concurs with the finding and is strengthening procedures to ensure expenditure reviews and approvals are documented and retained.