Finding Text
2022-005 Chesapeake Bay Program - Grant No. CB96343601; Grant period - Year ended June 30, 2022. Significant Deficiency. As discussed at Finding 2022-004 2022-004 Internal Controls over Financial Reporting. Condition: Credit card bills are being paid by the Consortium which include allowable/allocable costs related to the major programs. Intercompany payables for grant expenditures relating to the credit card bills are not being recorded; however, the intercompany receivables are being recorded for the Consortium. Criteria: Internal controls should be in place to provide reasonable assurance that when credit card charges are incurred and the bills are paid by the Consortium, the corresponding grant expense/payables and intercompany receivables are recorded. Cause: Inadequate design of controls over recording intercompany credit card expenditures. Effect: Grant expenditures were understated. Recommendation: Accounting processes and procedures should be reviewed and revised to include the process of allocating credit card bills to corresponding grants and reconciling the intercompany receivables and grant payables. Views of Responsible Officials and Planned Corrective Actions: The Consortium agrees with the finding and are working to improve the accounting processes and procedures.