Finding 584653 (2023-002)

Criteria or Specific Requirement – Management is required to establish and maintain effective internal control over the federal award that provides reasonable assurance the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition – The Organization does not have sufficient internal controls to ensure proper approval of invoices of federal award expenses. Approval documentation for the payment of seven invoices was not maintained. Context – A sample of nineteen expenses related to federal award programs was selected. Our testing found seven expenses without proper approval documentation. Cause – During the year under testing, there was a period of time when invoices of federal award expenses were approved during periodic meetings. While there is evidence of the meetings occurring, there is no documentation of the specific invoices approved during the meetings. During the year, this process was changed to include formal documentation of approval. Effect or Potential Effect – Program compliance requirements are at risk of not being met. Questioned Costs – There are no questioned costs. Recommendation – We recommend the Organization implement a policy to ensure retention of approval documentation. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding and has taken steps to ensure documentation and processes are adhered to.