Finding 514624 (2023-001)

Finding 2023‐001: Allowable costs – Significant deficiency in internal controls over compliance. Coronavirus State and Local Fiscal Recovery Funds ALN 21.027. 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. The Organization’s control policies state that all credit card charges are to be reviewed by management prior to the monthly statement being paid. Condition: During allowable cost testing for federal grants, 4 out of the 25 samples tested did not have documented approval from management of the charges on the credit card statement prior to payment. Cause:  Due  to  oversight,  management  of  the  Organization  missed  approving  charges  on  two  credit card statements during the year. Effect: The Organization’s reporting of allowable costs is not fully documented in accordance with its internal control procedures over compliance. Recommendation:  Management  should  implement  controls  related  to  documentation  of  approval for all transactions prior to the expense being paid to the grant. Management’s Response: See corrective action plan.