Finding Text
2024-001 – Payments to Vendors
Federal Agency: U.S. Department of Agriculture
Federal Program: Child Nutrition Cluster
ALN(s): 10.553, 10.555, 10.559
Pass-through Agency: Michigan Department of Education
Grant Number(s): 231970, 241970, 240910, 231960, 241960, 230900, 240900
Criteria: Board Police 6111 states that “internal controls must provide reasonable assurance that transactions are properly recorded and accounted for in order to permit the preparation of reliable financial statements and federal reports.” Payments to vendors should be substantiated by appropriate invoices that include details of the service provided for whom, when, how much, and other details required by the contracts and purchase orders.
Condition: One transaction selected for testing included an invoice related to another entity; this invoice was erroneously paid in conjunction with an appropriate invoice.
Cause: The vendor erroneously sent an incorrect invoice to the School District and the error was not noticed when the payment was authorized or when the payment was processed.
Effect: The School District made a payment to a vendor for an unallowable expenditure.
Perspective: The invoice erroneously paid totaled $144.14. This is approximately one percent error rate within the sample selection, which extrapolated out to the total population tested equates to approximately $1,305.
Recommendation: The School District should follow up with the vendor to correct the billing and review its invoice approval and payment process to ensure that only legitimate bills get processed.