Finding Text
Finding 2022-007 Lack of Internal Control over Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Cash Disbursements
Federal Agencies: US Department of the Interior, US Department of Housing and Urban Development, and US Department of Education
Federal Programs: Bureau of Indian Affairs Compact (BIA Compact), NAHASDA, and Alaska Native Education Program (AK Native Ed), respectively
Assistance Listing Numbers: 15.022, 14.867, 84.356, respectively
Award Numbers: GT-OSGT043-16 (BIA Compact), 55-IT0211860 and 20BV0211860 (NAHASDA), 356A210011 (AK Native Ed)
Award Years: 2022 (BIA Compact), 2022 (NAHASDA), and 2022 (AK Native Ed)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Adequate internal control over cash disbursement transactions should be in place to ensure that documentation is retained for a reasonable period of time, which includes proof of managerial approval, documentation of approval of account coding, and other necessary purchasing documents.
Condition and Context: During our testing of cash disbursement transactions we noted 2 out of 25 transactions tested under the BIA Compact program, 2 out of 25 transactions tested under the NAHASDA program, and 1 out of 7 of the transactions tested under the AK Native Ed program which lacked necessary supporting documentation.
Cause: Lack of internal control over compliance and activities allowed or unallowed and Allowable costs/cost principles cash disbursement transactions.
Effect: The lack of supporting documentation allows for the potential for misstatement of expenditures coded to federal programs.
Questioned Costs: $93,748 (NAHASDA), $113,598 (AK Native Ed). Known and likely questioned costs under the BIA Compact program are below the $25,000 reporting threshold.
Repeat Finding: This is a repeat finding of 2021-006, therefore we believe it to be a systemic issue.
Recommendation: We recommend the Council adheres to its internal control policies to ensure accurate reporting of cash disbursement transactions.
Management’s Response: Management concurs with the finding. See Corrective Action Plan.