Finding 398432 (2023-005)

Significant Deficiency
Requirement
ABL
Questioned Costs
-
Year
2023
Accepted
2024-05-23

AI Summary

  • Core Issue: The CFO's reporting of major program costs lacked a second review, increasing the risk of fraud and error.
  • Impacted Requirements: Payroll and major program costs should have a second individual review to ensure proper segregation of duties.
  • Recommended Follow-up: The CEO or another key employee should review and approve all governmental grant reports and payroll registers.

Finding Text

Condition: The CFO’s reporting of major program costs through the State of Arizona’s grant management system (eCivis) was not reviewed by a second individual. In addition, there was no independent review of the payroll registers selected during major program testing. Criteria: To better segregate duties, payroll and other costs charged to the major program should be reviewed and approved by a second individual. Cause and effect: The internal controls of the Foundation were not functioning as designed, resulting in an increased risk of fraud and error. There was an accumulated variance of $7,947 between costs reported through e-Civis and the accounting system. Recommendation: To better segregate duties, I recommend that governmental grant reports and the payroll registers be reviewed by the CEO or other key employee. Views of Responsible Officials: The Foundation will have the staffed CEO review and sign off on all reports and payroll registers in general with a specific focus on those tied to government grants.

Corrective Action Plan

The Foundation will work to have the staffed CEO review and sign off on all reports and payroll registers in general with a specific focus on those tied to government grants.

Categories

Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 398433 2023-006
    Significant Deficiency
  • 974874 2023-005
    Significant Deficiency
  • 974875 2023-006
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.53M
10.551 Supplemental Nutrition Assistance Program $73,084