Finding 480243 (2023-002)

Material Weakness
Requirement
AB
Questioned Costs
-
Year
2023
Accepted
2024-08-01
Audit: 316476
Organization: Brother Bill's Helping Hand (TX)

AI Summary

  • Core Issue: There is a material weakness in internal controls over compliance due to missing management approvals on invoices.
  • Impacted Requirements: Compliance with Section 200 of the Code of Federal Regulations, which mandates robust internal controls for allowable costs.
  • Recommended Follow-Up: Establish a standard procedure for documenting management approval of credit card transactions before payment.

Finding Text

Finding 2023‐002: Allowable costs – Material weakness in internal control over compliance. 21.027: Coronavirus State and Local Fiscal Recovery Funds Criteria: Section 200 of the Code of Federal Regulations requires recipients to implement robust internal controls to ensure compliance with cost principles for all transactions charged to the grant. Condition: During allowable cost testing for federal grants, 6 out of the 24 invoices tested did not have documented approval from management. Cause: The Organization did not have a standard procedure in place to document management’s approval for credit card transactions prior to payment. Effect: The Organization’s reporting of allowable cost is not fully documented in accordance with internal control procedures over compliance. Questioned Costs: None Recommendation: Management should implement controls related to documentation of approval for all credit card transactions prior to payment. Management’s Response: See corrective action plan.

Corrective Action Plan

Explanation: The audit conducted by SFC of Brother Bill’s Helping Hand identified noncompliance with Section 200 of the Code of Federal Regulations, which mandates recipients to establish robust internal controls ensuring adherence to cost principles for all grantrelated transactions. Among the sampled invoices for allowable costs under federal grants, 6 out of 24 lacked documented approval from management. Furthermore, the organization lacked a standardized procedure for documenting management approval of credit card transactions prior to payment. Analysis: Brother Bill’s Helping Hand acknowledges the non-compliance with Section 200 as identified by SFC. However, we maintain that the assertion implying absence of controls or standardized procedures for credit card expenditures is inaccurate. Each reimbursement submission to Dallas County undergoes meticulous scrutiny and personal vetting by CEO Wes Keyes. Mr. Keyes reviews every receipt before reimbursement and, if necessary, consults with the respective staff members regarding any discrepancies. Each reimbursement bears Mr. Keyes’ signature of approval. Nonetheless, SFC has recommended that CEO Keyes review and approve the credit card statement prior to payment, a practice not previously adhered to by BBHH. Actions Taken: Effective June 17, 2024, Mr. Keyes will review and sign each credit card statement prior to payment. These signed statements will be securely stored for potential future documentation needs. Responsibility: CEO Wes Keyes and Operations Manager Sarah Cienfuegos are responsible for implementing the change requiring CEO approval on credit card transactions prior to payment. Timeline: The corrective action has been implemented as of June 17, 2024. Monitoring: No ongoing monitoring is deemed necessary as the corrective measures have already been executed.

Categories

Allowable Costs / Cost Principles Material Weakness Reporting

Other Findings in this Audit

  • 480242 2023-001
    Material Weakness
  • 480244 2023-001
    Material Weakness
  • 480245 2023-002
    Material Weakness
  • 480246 2023-001
    Material Weakness
  • 480247 2023-002
    Material Weakness
  • 1056684 2023-001
    Material Weakness
  • 1056685 2023-002
    Material Weakness
  • 1056686 2023-001
    Material Weakness
  • 1056687 2023-002
    Material Weakness
  • 1056688 2023-001
    Material Weakness
  • 1056689 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $570,899
10.569 Emergency Food Assistance Program (food Commodities) $160,644
21.023 Emergency Rental Assistance Program $108,750
10.187 The Emergency Food Assistance Program Commodity Credit Eligible Recipient Funds $55,541
10.182 Local Food Purchase Assistance $20,684