Finding 392644 (2023-003)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2024-04-09
Audit: 302955
Organization: Mesa Independent Living (CA)

AI Summary

  • Core Issue: Inadequate documentation of management's review and approval for invoices and payment documents.
  • Impacted Requirements: Internal control policies for documenting reviews are insufficient, potentially affecting financial statements.
  • Recommended Follow-Up: Management should create and enforce a policy to ensure proper documentation of reviews and approvals for all payment documents.

Finding Text

• Criteria or specific requirement: Proper Documentation Finding 2023-3 • Condition: There was little to no evidence that invoices and documents for payment were properly reviewed and/or approved by management. • Context: The results of the internal control testing for cash disbursements indicated little to no evidence of management’s review and approval on each individual supporting document. • Effect: Internal control polices and procedures with respect to documenting management review and approval are not sufficient or are not in place which can affect the financial statements. • Cause: Internal control policy for the proper documentation and management review and approval process is not in place or is not being adhered to. • Recommendation: Management should develop and consistently monitor a policy to document the review and approval of each document for payment and ensure that the procedures are adhered to. • Management’s response: All invoices and documents for payment are reviewed by the Director of Operations and the Executive Director during weekly meetings prior to payment. All invoices and documents for payment are saved and attached to the payment in MESA’s accounting software. The Executive Director reviews all monthly bank statements for irregularities. The Accounting Advisor reconciles all bank accounts, maintains the general ledger and supports the preparation of monthly and year end financial statements. These policies are maintained in MESA’s Accounting Manual and are adhered to. Management recognizes that affixing documentation of review and and approval of each supporting document is needed to verify that this policy is being followed and amended the Accounting Manual to reflect these changes immediately.

Corrective Action Plan

Finding 2023-3 Upon discovery of the deficiency, MESA immediately went through the process of opening an interest- bearing account for the deposit of all remaining Homekey Round 2 funds.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 392642 2023-001
    Significant Deficiency
  • 392643 2023-002
    Significant Deficiency
  • 392645 2023-001
    Significant Deficiency
  • 392646 2023-002
    Significant Deficiency
  • 969084 2023-001
    Significant Deficiency
  • 969085 2023-002
    Significant Deficiency
  • 969086 2023-003
    Significant Deficiency
  • 969087 2023-001
    Significant Deficiency
  • 969088 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Department of the Treasury $1.20M