Finding Text
Federal Agency: U.S. Department of Health and Human Services Federal Program: 93.558, Temporary Assistance for Needy Families Cluster Criteria or Specific Requirement - OMB Circular A-122, Costs Principles for Non-Profit Organizations requires specific compliance with the provisions of allowable costs and activities. The Organization is responsible for having internal controls designed to ensure compliance with this provision. Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, require that, among other things, that direct charges to federal awards be for allowable costs. To be an allowable cost, charges must be supported by appropriate documentation and be properly approved. The specific requirements for allowable activities are unique to each federal program and are found in the laws, regulations, and the provisions of each contract or grant agreement pertaining to the federal program. Condition - During our testing of non-payroll expenditures, we noted that supporting documentation could not be obtained for certain cash disbursements for the federal program. Cause - There is a lack of sufficient adherence to internal controls to ensure supporting documentation for all payments charged to the program are accurately, and adequately maintained. Effect - Lack of supporting documentation could result in misstatements due to error or fraud. This has the potential to result in disbursements being made in amounts that are not allowable program expenses or unauthorized transactions that may be questionable or disallowed expenditures. Questioned Costs ? Immaterial amount. Context - As part of our audit procedures, we sampled a total of 24 non-payroll expenditures incurred to test internal controls over compliance and compliance with the allowable costs and activities of federal awards. During our testing of non-payroll expenditures, we noted the following deviations: - Two selections in our statistically valid sample lacked appropriate documentation to substantiate certain charges included in the expenditures incurred and applied to the federal program. Repeat Finding - No Recommendation - The Organization should re-evaluate adherence to their internal controls over the general disbursement and expenditure allocation processes and implement policies to ensure support is obtained and maintained for all expense transactions.