Finding 36762 (2022-001)

Significant Deficiency
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2023-05-07

AI Summary

  • Core Issue: There is a significant deficiency in internal controls regarding invoice approvals for federal grants.
  • Impacted Requirements: 10 out of 26 invoices lacked documented management approval, violating compliance procedures.
  • Recommended Follow-Up: Implement a standard procedure to ensure all invoices are approved and documented by management.

Finding Text

Finding 2022-001: Allowable costs ? Significant deficiency in internal control over compliance 21st Century Community Learning Centers Criteria: CISDR?s internal control procedures over compliance stipulate that all invoices be approved by management. Condition: During allowable cost testing for federal grants, 10 out of the 26 invoices tested did not have documented approval from management. Cause: CISDR did not have a standard procedure in place to document management?s approval. Effect: CISDR?s reporting of allowable cost is not fully documented in accordance with internal control procedures over compliance. Questioned Costs: None Recommendation: Management should ensure documentation of approval of all invoices are kept on file. Management?s Response: See corrective action plan.

Corrective Action Plan

Finding No. 2022-001: Allowable costs ? Significant deficiency in internal control over compliance. The 21st Century grant director was provided a PEX card (prepaid credit card) to make purchases for the program. The purchases were approved per the budgeted line items by the grantor. The CFO met with the program director on a bi-weekly basis and the program director outlined all anticipated expenses for the program. They were discussed and approved during the meeting but were not physically documented. The purchases were made and receipts were uploaded into the PEX system, however there was no signature on the receipts to document the approval. These expenses were later reviewed and summarized by the CFO in an Excel spreadsheet prior to billing the grantor. We have incorporated and communicated changes to our policy and standard procedure to ensure the documentation of manager?s approval of invoices are kept on file. Employees under the 21st Century program have been trained and approval of purchases are now physically documented electronically as of January of 2023. Given CISDR's expanded workload and doubling the number of schools from two years prior, the Finance team was functioning with one full time CFO and one part time accountant. In March 2023 we hired a full-time senior accountant to manage the internal controls compliance over expenditures. The plan has already been implemented.

Categories

Allowable Costs / Cost Principles Reporting Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 613204 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.287 Twenty-First Century Community Learning Centers $1.18M
93.558 Temporary Assistance for Needy Families $258,419
84.425 Education Stabilization Fund $100,403
14.218 Community Development Block Grants/entitlement Grants $23,014