Finding Text
Finding 2022-004: Cash Disbursements (Significant Deficiency) Criteria: Expenses that are charged and allocated to government contracts must be supported by invoices or other documentation evidencing the existence of the expenditure. The expenses must also be recorded in accordance with accounting principles generally accepted in the United States of America. Expense reimbursements must include evidence of review and approval by a responsible supervisory official having knowledge of the purpose of the expenditures. Statement of Condition: For 22 of our 60 samples, review and approval by a supervisory official for expense reimbursements was not performed. In addition, for three of our 60 samples, expenditures that were charged to the government contract were not recorded in the correct period. For four of our 60 samples, supporting documentation, such as an invoice, was not provided. Cause: Procedures and internal controls associated with the review and approval of expenditures, including review of supporting documentation and review of the allocation of expenditures to the appropriate period, were not adequately documented or effectively operating. Effect: Management did not have sufficient documentation for expenditures allocated to government contracts. Questioned Costs: None Identification of Repeat Finding: No Recommendation: We recommend that management enhance its policies, controls and procedures to ensure that there is appropriate segregation of duties over the review and approval of expenditures charged to federal programs. We recommend that management enhance its policies, controls and procedures to ensure that expenditures are recorded in the correct period and the existence of those expenditures are supported by appropriate documentation, such as an invoice. View of Responsible Officials: Management is in agreement with the finding. Management will enhance the policies, procedures and controls in place over the cash disbursement process to ensure appropriate segregation of duties over approvals are in place and expenses are recorded in the correct period with supporting documentation.