Finding 515156 (2024-003)

Finding 2024-003 Lack of Internal Control over Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agencies: U.S. Department of Education Federal Programs: “Stay North”: Angoon Community Association’s NACTEP ALN: 84.101 Award Numbers: V101A210009 Award Years: 2021. Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: Internal control procedures should be in place to ensure that payroll accounting system is maintained to be able to accurately record payroll transactions. Payroll transactions should be supported by approved timesheets, pay rates, coding, and deductions should be documented in the personnel files. Condition and Context: During our tests of transactions for internal controls over compliance and compliance we identified one transaction that was coded to the incorrect federal grant. Originally, it was coded to the incorrect object code per the DEED uniform chart of accounts. When the transaction was corrected, the fund number was changed to what the object code should have been resulting in the cost being charged to the incorrect program. Cause: Lack of internal control over payroll transactions. Effect: The effect is that one single transaction was coded to the incorrect program. Possible other effects from lack of internal controls could result in additional costs being incorrectly coded and not prevented, detected, or corrected in a timely manner. Questioned Costs: Questioned costs are under the reporting threshold of $25,000. Repeat Finding: No and we believe this to be an isolated incident. Recommendation: We recommend the District adhere to their internal control policies to ensure accurate reporting of payroll transactions. Managements Response: Management agrees with this finding. See Corrective Action Plan.