Finding Text
2024-001 Inadequate Documentation
Criteria: Under Uniform Guidance, costs charged to federal programs need to be supported with proper documentation and reviewed to make sure they’re accurate, necessary, and allowed.
Condition: During our testing of reimbursement and cost allocations charged to federal awards, we noted multiple instances where documentation supporting the expenditures was incomplete or missing. Specifically:
• Several allocations lacked invoices or receipts to support the claimed amounts.
• Mileage reimbursements were not recalculated or independently reviewed before payment.
• A charge of $410 was identified as fraudulent but was still charged to a federal grant.
Cause: The organization’s internal review procedures over cost allocations and reimbursements were not consistently applied.
Questioned Costs: We identified $1,101 in costs that may not be allowable.
Effect: Without proper documentation and review, there’s a greater risk that unallowable costs could be charged to the grant, which may result in questioned costs or repayment.
Auditor’s Recommendation: We recommend that the organization strengthen its internal control procedures related to cost allocation and reimbursement by:
• Requiring complete supporting documentation (e.g., invoices, receipts) for all claimed costs.
• Implementing formal review and approval processes.
• Training staff responsible for reimbursement requests and approvals on federal requirements.
Grantee Response: WCASA acknowledges the finding and has since transitioned to a new financial services provider with strong knowledge of our systems and Uniform Guidance requirements. As part of this transition, additional procedures have been established to ensure proper documentation and review, including requiring documentation for all reimbursement requests, training personnel on federal requirements for allowable costs and strengthening the review and approval process.