Finding Text
2022-003 Small Business Administration Financial Assistance Listing #59.075 COVID-19 Shuttered Venue Operators Grant Program; SBAHQ21SV007152, July 10, 2021 to December 31, 2021 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the Organization is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: While the Organization had policies and procedures in place over the review and approval of expenditures, during the testing of expenditures there were certain items that lacked the documentation of such review and approval. The Organization did not retain the required documentation to support the review of expenditures. Cause: The Organization had turnover and limited staffing available. The review and approval process was a collaborative process that took place in face to face meetings without documentation retained. Effect: Lack of documented controls can result in expenditures that are otherwise not an allowable cost or allowable activity. Questioned Costs: None reported Context/Sampling: A nonstatistical sample of 60 transactions out of 1,042 total transactions were selected for testing, which accounted for $108,778 of $1,276,757 of federal program expenditures. Repeat Finding from Prior Year(s): No Recommendation: We recommend the Organization?s management implement a process that allows for documented approval of expenditures to ensure that the audit trail is retained for such expenditures. Views of Responsible Officials: Management agrees with the finding.