Finding Text
Criteria
The University’s purchasing policy (as amended by Procedimiento de Autorización de Compra de Bienes y Servicios, normative letter No. 2021-04) is created with the purpose of establishing procedures governing the initiation, authorization, and review of all expenditures. To facilitate this process the accounting department developed a checklist that promotes the compliance with this policy. The normative letter No. 2021-04 establishes that the purchases of goods and services continue to be executed through the generation of purchase requisitions in the Webadvisor electronic platform, which also serves as reference to verify the availability of funds before the creation of the purchase requisition.
Also, the normative letter No. 2021-04 requires the completion of an authorization form (appendix A form) for the purchase of goods and services that exceed $5,000. The authorization form establishes different levels of approvals that are necessary depending on the amount of the disbursement.
Condition found
During our audit procedures on internal controls over compliance of federal programs of the University, we tested a sample of seven (7) transactions and noted that one (1) of the transactions did not include the required Appendix A.
Cause
Management believes this to be an isolated case. The particular transaction involved a renovation of a prior year's contract with a known vendor, previously evaluated, and this led to an oversight in not requiring Annex A.
Effect
Not having the complete documentation at the time of recording or payment may lead to inadequate recording, duplicity in recording or in payment, or recording invalid transactions. This condition does not allow for a proper and complete examination of the financial activities performed by the Institution. The internal controls established to ensure that the check requests are eligible under the University’s policy and that each invoice or contract is paid only one time were not properly executed. Pertinent information regarding costs, authorizations, obligations, type of expenditures and its allowability, among other requirements, was not properly documented.
Questioned cost
None
Context
Of the seven (7) total transactions amounting to $129,114 selected for examination of the federal program “COVID-19-Higher Education Emergency Relief Fund - Institutional Portion”, the required requisition was missing for one (1) transaction, totaling $21,760.
Identification of a repeat finding
This is not a repeat finding.
Recommendation
We recommend management to strengthen its quality review controls for disbursements in order to make certain that all documentation required by the University´s policies and procedures are complete and authorized.