Finding Text
Finding 2021-013 Gift Cards - Activities Allowed or Unallowed; Allowable Costs/Cost
Principles – Noncompliance and Material Weakness in Internal Controls
Over Compliance
Agency Department of the Treasury
ALN 21.019
Program COVID-19 – Coronavirus Relief Fund
Award Year FY 2021
Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic
Development
Pass-Through Entity
Identifying Number
20-CRF-024
Criteria 2 CFR 200.403(g) states that for costs to be allowable under Federal
awards, they must be adequately documented and there must be sufficient
documentation. 2 CFR 200.303 requires that non-federal entities receiving
federal awards establish and maintain internal controls designed to
reasonably ensure compliance with federal statutes, regulations, and
terms and conditions of the federal award.
Condition During our testing of gift cards purchased by the City for distribution to
individuals as an incentive for receiving the COVID-19 vaccine, we noted
that the City did not maintain evidence of reconciling the gift card
purchases to the gift cards distributed. Cause Policies and procedures were not appropriately adhered to in certain
instances to ensure that reconciliation is done for gift card distributions.
Effect or potential
effect
We were unable to confirm that all gift cards purchased using program
funds were distributed only to eligible individuals per the City’s COVID-19
vaccination incentive program. Gift cards may have been distributed to
individuals not meeting the City’s requirements for eligibility.
Questioned costs None.
Context The City used program funds to purchase $76,013 in gift cards for use as
an incentive to encourage individuals to receive the COVID-19 vaccine. The
City was not able to provide documentation that reconciled the gift cards
purchases against distributions of gift cards.
Identification as a
repeat finding
Not a repeat finding.
Recommendation We recommend the City ensure its policies and procedure are followed on a
consistent basis.
Views of
responsible officials
Management concurs with the finding. Management will review current
policies and will ensure that policies and procedures are adhered to ensure
that proper reconciliations are done.