Finding Text
Finding Type: Material weakness, internal controls over federal award. Programs: Formula Grants for Rural Areas and Tribal Transit Program (Assistance Listing #20.509) Criteria: Costs must meet certain general criteria to be allowable under federal awards. One criterion is that the costs be adequately documented. Condition/Finding: 9 of the 40 accounts payable expenses that were selected for testing included documentation showing that an individual with knowledge of the transaction reviewed the invoice to: verify that it was necessary and reasonable for the performance of the federal award, verify that it was accurate in amount, authorize the voucher for payment, or establish the appropriate general ledger code for posting. Further, none of the 45 payroll expenses that were selected for testing included employee timecards reviewed and authorized for payment by their immediate supervisor. Cause: The Authority?s internal control policies currently do not require documented review and authorization of accounts payable vouchers or employee timecards. Effect: As a result of this condition, the Authority does not have adequate documentation demonstrating that an individual with appropriate knowledge of the transaction has reviewed that the transaction is allowable, free of error, and necessary and reasonable for the performance of the federal award. Questioned Costs: No costs have been questioned as a result of this finding. Recommendation: We recommend that the Authority update its policies and procedures to provide documented proof of review and authorization by management of all expenses. These policies and procedures should be updated to conform with the Uniform Guidance as soon as practical. View of Responsible Officials (Corrective Action): See corrective action plan.