Finding Text
2022-003 Allowable Costs/Cost Principles - Significant Deficiency in Internal Control over Compliance Identification of federal programs: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Title 2 U.S. Code Part 200.403(g) requires that for costs charged to a federal program to be allowable, they must be adequately documented. Condition: Payroll related costs charged to the program did not have Personal Action Forms to document the rate of pay for the employee in accordance with the IRA Council?s own Finance Policies & Procedures Manual Chapter 7.1. Additionally, major procurements did not have the proper procurement authority approval and support in accordance with the IRA Council?s own Finance Policies & Procedures Manual Chapter 6.7 ? 6.10. Cause: The IRA Council was adjusting to challenges created by the COVID-19 pandemic. Effect or potential effect: Although charges were still approved and supported, not following established financial policies and procedures increases the risk that internal control failures, questioned costs and noncompliance could arise in the future over major federal programs. Questioned Costs: None Context: During our sample testing for allowable costs in 2022 as a major program, we identified 17 payroll transactions in our random allowable cost sample of 40 that did not have approved payrate support in the form of a Personal Action Form as required by the IRA Council?s own financial policies and procedures. Additionally, although no individual transaction exceeded program materiality were identified in our major program testwork, 2 vendors identified during capital additions testwork for both 2021 and 2022 were noted not to have additional quotes for supplies and services provided that were charged to the program, which exceeded the micropurchase threshold. Identification of Repeat Finding: Repeated for 21.027 Coronavirus State and Local Fiscal Recovery Funds. Recommendations: We recommend the IRA Council review its financial policies and procedures and implement and/or revise accordingly to ensure the conform to both uniform guidance and internal policies and procedures to satisfy adequate internal controls. Views of Responsible Officials: See Corrective Action Plan