Finding Text
Condition: Materials charged to project work orders and reported as installed, were not adequately supported by contractor invoices, and not identified in subsequent reconciliations tracking project activity for grant reporting.
Criteria: Effective controls are required to ensure reported project materials and related expenses are installed, completed and adequately documented for approved project area. Controls should include timely reconciliation between work order charges and related contractor invoices supporting installation of materials used to support proper safeguards, disbursement, and reporting.
Cause: Errors existed in the total materials charged to project work orders, which were not identified timely by the Cooperative’s current monitoring and control activity procedures.
Effect: Controls did not exist to adequately monitor and report the material charges on project work orders used for grant reporting. As a result, errors may exist in reported project expenses.
Questioned Cost and Context: Due to timing and volume of activity incurred on the grant project, material charges were evaluated in total for selected work orders as of December 31, 2023 and reconciled to contractor invoices over the same period. Testing identified $44,500 in material charges, of total project expenses of $1,129,351, not adequately supported and considered to be a questioned cost.
Recommendation: Procedures should be implemented to ensure more timely reconciliation of material charges to work orders and reporting project grant expenses. Adequate documentation should be maintained to support controls in place and installation of materials at defined project area. Procedures should include additional oversight and timely reconciliations of project expenses completed and reported.
Grantee’s Response: Management concurs. Large fiber installation project still in process at year-end. Subsequent reconciliations have been completed. Controls and other project processes have been improved to ensure more timely reconciliation of material charge-outs to the timing of the installation of material.