Finding Text
Finding 2022-002; Assistance Listing Number; 14.267, 16.320; Program Title - Continuum of Care Program; Services for Trafficking Victims; Federal Agency - U.S. Department of Housing and Urban Development; U.S. Department of Justice; Criteria - Uniform Guidance section 200.302 Financial Management requires non-federal entities to maintain accurate accounting of federal expenditures within its accounts, and to provide adequate controls over those expenditures.; Condition - Our test of controls over expenditures of non-payroll transactions identified nine of thirty and eleven of thirty transactions in Continuum of Care Program and Services for Trafficking Victims program, respectively, that did not include sufficient documentation of controls over allocation of costs. Errors included unapproved purchase orders, self-approved purchase orders, and expenditures without documentation of approval for the expenditure or allocation.; Cause - The Organization is experiencing challenges in transitioning to a hybrid remote office structure and turnover in the Organization.; Context - Expenditures were supported by receipts and invoices without exception. Expenditures without sufficient documentation of controls over allocation of costs appeared to be reasonable costs for programmatic activities.; Effect - Without consistent application of control processes, deviations that may be fraud will be difficult to differentiate from legitimate transactions, such as purchases for program participant day to day living expenses and gift cards.; Questioned Costs - None.; Prior Audit Finding - No.; Recommendation - The Organization should adopt a self-monitoring process to verify that documented controls are being consistently followed. The Executive Director’s expenditures should be approved by a member of the finance committee, or a relevant program manager if the cost is for a budgeted program expenditure.; Views of Responsible Officials - The Organization agrees with the finding, and will perform procedures to implement the recommendation.