Finding 399825 (2023-001)

Federal Program: ALN #15,875; Economic, Social and Political Development of the Territories Criteria: The Organization should have performed and documented their controls over cash management and reporting for their cost-reimbursement contracts. Condition: During the audit, we noted that while in the testing of transactions for allowable costs, the Organization had documentation of proper approvals, summary reimbursement requests to the grantor prepared by the Finance Manager were not reviewed nor approved before submission, therefore not meeting the minimum requirements of 2 CFR section 200.514. Cause: The Organization does not perform controls over submission requests from grantors due to having controls over expenses incurred that qualify for reimbursement. Effect: Due to the condition noted above, the Organization did not follow the requirements of 2 CFR section 200.514, which includes internal controls over reimbursements. The Organization does not have sufficient controls set in place to document the review and approval of the reimbursement summary of expenses submitted to grantors. Recommendation: The Organization should implement controls over summary submission reports prepared by the Finance Manager, including a review by the Controller and approval prior to submission. View of Responsible Officials: Management agrees with the finding presented by the audit. Management has taken corrective actions to meet this standard.