Finding Text
Finding 2019-008 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Per OMB 200.403(a) costs should be necessary and reasonable for the performance of the federal award.
Condition and Context: The Community could not provide adequate supporting documentation for non-payroll costs charged to the Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD) programs. During our review of non-payroll costs charged to the programs, the Community could not provide supporting documentation (invoice, check request, or management approval) for 8 out of 18 non-payroll transactions charged to the CTG program and 12 out of 12 non-payroll transactions charged to the ISD program.
Cause: Lack of internal controls over supporting documentation and approval over non-payroll transactions charged to the programs.
Effect: Lack of internal control over non-payroll transactions pose the risk that the Community will expend federal funds for non-grant purposes.
Questioned costs: Actual and likely questioned costs are below the reporting threshold of $25,000. Per our review of the transactions charged to the program, the expenditures appeared to be allowable; however, management was unable to provide adequate supporting documentation for us to determine for certain.
Repeat finding: This is a repeat of Finding 2018-007; therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management implement policies and procedures to ensure that only allowable costs are charged to the program and that supporting documentation be kept for all transactions.
Management Response: Management agrees with this finding, see Corrective Action Plan.