Finding 555157 (2022-007)

Material Weakness
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2025-04-15

AI Summary

  • Core Issue: 30 out of 45 tested expenses lacked proper documentation, violating 2 CFR 200.403.
  • Impacted Requirements: Costs charged to federal programs must be adequately documented; insufficient internal controls over credit card usage contributed to this issue.
  • Recommended Follow-Up: Implement a formal credit card policy requiring detailed receipts for all charges, with reviews and approvals to ensure compliance.

Finding Text

2022-007 Allowable Cost Documentation Research and Development Cluster (ALN 47.041-Engineering, Award 1940055, Award Period 9/1/19 – 8/31/22) Federal Agency: National Science Foundation Criteria: 2 CFR 200.403 requires that costs must be adequately documented. Condition: We selected 45 non-payroll expenses for testing. Of those 45, 30 were found to have insufficient documentation to determine if the cost were allowable or unallowable to the federal program. The 30 expenses found to have insufficient documentation were purchased on a credit card. Cause: The Organization did not maintain sufficient internal controls over credit card usage to ensure detailed receipts were available to support the expense charged to the federal program. Effect: The Organization was not compliance with 2 CFR 200.403 which requires that costs charged to federal programs are adequately documented. Without a policy that requires detailed receipts to be submitted for credit card charges, there is a risk that unallowable costs are charged to the program. Identification as a repeat finding, if applicable: The finding is not a repeat finding of the prior year. Recommendation: We recommend the Organization implement internal controls that require detailed receipts to be submitted for all credit card charges. The charges listed on the receipts should be reviewed for allowability and approved by the appropriate personnel before charging to the federal program. Response: The Organization will implement a formal credit card policy which requires that detailed receipts be submitted for review and approval for all credit card charges. Questioned Costs: $9,987. This is the total known cost from the 30 transactions identified in our sample to have insufficient documentation.

Corrective Action Plan

Finding 2022-007 – Allowable Cost Documentation In response to the finding, GEM addressed allowable cost documentation by instituting the following: GEM established a formal credit card policy in the employee handbook that explains the policy and procedures for turning in receipts monthly. Anticipated date of completion: This policy has been in effect since September 30, 2023. Responsible party: Jamie Hicks, Senior Accounting Manager

Categories

Questioned Costs Allowable Costs / Cost Principles

Other Findings in this Audit

  • 555154 2022-004
    Material Weakness Repeat
  • 555155 2022-005
    Material Weakness Repeat
  • 555156 2022-006
    Material Weakness Repeat
  • 555158 2022-008
    Material Weakness
  • 1131596 2022-004
    Material Weakness Repeat
  • 1131597 2022-005
    Material Weakness Repeat
  • 1131598 2022-006
    Material Weakness Repeat
  • 1131599 2022-007
    Material Weakness
  • 1131600 2022-008
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
47.041 Engineering $1.18M
47.049 Mathematical and Physical Sciences $740,000