Finding Text
2022-004 Department of Agriculture, Passed through Minnesota Department of Education Federal Financial Assistance Listing/CFDA Number 10.553/10.555/10.559 Child Nutrition Cluster Activities Allowed or Unallowed; Allowable Costs and Cost Principles Material Weakness in Internal Control over Compliance Criteria ? A good system of internal accounting control contemplates an adequate system for ensuring that adequate documentation of expenditures, including payroll transactions, is reviewed and maintained. Condition ? During the course of our engagement, we noted instances where documentation of wage rates was not maintained, employees were paid for incorrect hours or at incorrect rates, and invoices were paid in an incorrect amount. Cause ? The District does not have an internal control system designed to review and maintain documentation for expenditures, including payroll transactions. Effect ? This deficiency could result in a misstatement to the financial statements that would not be prevented or detected. Questioned Costs ? None reported Context/Sampling ? A non-statistical sample of 60 transactions out of 538 total transactions were selected for testing, which accounted for $101,217 of $809,248 of federal program expenditures. Repeat Finding from Prior Year(s) ? Yes, finding 2021-004. Recommendation ? A thorough review and reconciliation of supporting documentation for expenditures, including payroll transactions, should be performed before amounts are disbursed. Supporting documentation should be maintained once review is documented and performed. Views of Responsible Officials ? There is no disagreement with the audit finding.