Finding Text
U.S. Department of the Treasury Passed through State of Arizona, Maricopa County (Maricopa
County), Federal Financial Assistance Listing #21.027, PE386182260A4 2022, Coronavirus State
and Local Fiscal Recovery Funds
Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Material Weakness in Internal Control over Compliance and Material Noncompliance
Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective
internal control over federal awards that provides reasonable assurance that the Foundation is
managing the federal award in compliance with federal statutes, regulations and terms and
conditions. A complete system of internal controls requires all expenditures be properly
approved and supported by appropriate documentation. In addition, all expenditures charged to
the federal program are required to be allowable costs under the program and based on actual,
and not budgeted amounts.
Condition: 51 out of 60 expenditures tested lacked proper documentation of review and
approval. 51 out of 60 expenditures tested were based on budgeted amounts expended and not
actual amounts with no true up performed. 1 out of 60 expenditures tested were deemed
unallowable based on the terms of the grant agreement.
Cause: The Organization has limited staffing and did not have proper controls in place relating to
review of expenditures charged to the program for allowable activities and allowable costs. The
Organization did not have controls in place to properly allocate, record and track actual costs
incurred to the grant.
Effect: Not having a system to track actual grant expenditures incurred properly to grants
increases risk that improper expenses may be paid and charged to the federal program or
charged at the wrong amount.
Questioned Costs: Total known questioned costs are $53,986.
Context: A nonstatistical sample of 60 transactions were selected for testing, which accounted
for $297,033 of $640,075 reported program expenditures.
Repeat Finding from Prior Years: No
Recommendation: We recommend the Foundation’s management implement a process that
allows for actual expenditures to tracked, allocated, and be billed to the specific program and
ensure that supporting documentation of review is retained to demonstrate compliance with
the federal program.
Views of Responsible Officials: Management agrees with the finding.