Finding 554052 (2023-002)

Material Weakness

Requirement

Questioned Costs

Year

2023

Accepted

2025-04-04

Audit: 352716

Organization: Oklahoma Indian Legal Services, Inc. (OK)

Auditor: Hogantaylor LLP

AI Summary

Core Issue: The Organization failed to obtain required Board approval for a fixed asset purchase over $25,000.
Impacted Requirements: Internal controls for compliance with grant procurement procedures were not effectively implemented.
Recommended Follow-Up: Ensure that all future fixed asset purchases over $25,000 receive Board approval as per policy.

Finding Text

Finding: Item 2023-002–Procurement Procedures Legal Services Corporation 2022 Disaster Supplement Grant (CFDA# 09.737018) Material Weakness Criteria: Management is responsible for designing, implementing, and maintaining effective internal controls to ensure compliance with grant requirements. Condition/context: The Organization's policy and procedures for procuring fixed assets require fixed asset purchases greater than $25,000 to be approved by the Board of Directors. During the year ended December 31, 2023, there was one fixed asset purchase meeting this criterion, however, there was no documentation that the Board of Directors approved the purchase. Cause: This was an oversight by the responsible parties. Effect: The designed control was not operating effectively. However, as the fixed asset was an allowable purchase, it did not result in any noncompliance. Questioned Cost: Not applicable. Repeat finding: This is not a repeat finding. Recommendation: We recommend that the Organization operate the control as designed and seek board approval for fixed asset purchases greater than $25,000. Views of responsible officials: See corrective action plan.

Corrective Action Plan

The purchase in question is related to the LSC Disaster funding. One of the primary purposes of this funding was to purchase a vehicle to enable OILS to provide quick response to disasters in Oklahoma. Due to LSC guidelines, OILS was required to receive prior approval from LSC for the purchase, which OILS did request and receive. Additionally, the purchase of the vehicle was included in the annual budget approved by the Board of Directors. Clarifying language will be added to the Finance Manual under Section 6.1 Purchases to indicate that the Executive Director is authorized to execute all purchases in any amount, wherein the Board of Directors has provided prior approval and/or the funds for the activity have been appropriated in the adopted annual budget, including any contingency budget. Additionally, the management team collectively will work to ensure that purchases within the policy approval limits are brought to the Board for review and approval and that the approval is reflected in the meeting minutes. Anticipated Date of Conpletion: Revisions to teh Finance Manual, including the clarifying language in Section 6.1, will be submitted to the Board of Directors for adoption no later than the November 12, board meeting.

Other Findings in this Audit

1130494 2023-002

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
09.U01	Native American Grant - 2023	$1.01M
16.608	Tribal Court Assistance Program	$243,047
09.U02	Disaster Supplement Grant - 2022	$202,357
16.815	Tribal Civil and Criminal Legal Assistance Grants, Training and Technical Assistance	$96,873
09.U00	Native American Grant - 2022	$50,514