Finding Text
2022-005 FindingAccounts payable testing and internal controls.Programs:Child Nutrition Cluster, ALN #10:555; 10:559COVID-19 ? Elementary & Secondary School Emergency Relief I & II(ESSER) ALN #84.425DCOVID-19 ? Elementary & Secondary School Emergency Relief III ARP (ESSER) ALN #84.425UCompliance Requirement: Allowable Costs/Cost PrinciplesRepeat Finding:NoneCriteria:An effective system of internal control is the responsibility of management. Management should establishan internal control system that ensures strong financial accountability and safeguarding of assets. Thisincludes maintenance of accurate accounting records and following the proper purchasing procedures.Condition:During our testing of forty (40) invoices, we noted the following exceptions:1. Sixteen (16) invoices where the purchase order was dated after the invoice date.2. One (1) invoice tested showing payment more than 45 days after the invoice date.3. Five (5) instances of no indication, signature and/or dated by the employee, of receipt of goodsor services.4. Two (2) in sample where the district reimbursed the wrong mileage rate according to the IRSallowable rate for 2021.5. One (1) in the sample where the higher quote was chosen without an explanation documented. 6. Four (4) in the sample where the invoice was not signed and/or dated when received.Context:Internal control procedures were tested for accounts payable in the major federal funds.Cause:The district did not properly ensure that the accounts payable internal control system was being followedfor all transactions including all purchasing procedures required by the state.Effect:Without a proper internal control system being in place to ensure accurate accounting records, there isan increased risk that the financial statements could be misstated.Questioned Cost:NoneRecommendation:District should implement policies and procedures to establish an internal control system that will requireaccountability with regard to accounts payable and purchasing. This will ensure the proper safeguardingof assets and accurate accounting records.Response:Please refer to the Auditee?s Corrective Action Plan beginning on page 80.