Finding Text
2022-003 – Activities Allowed and Allowable Costs over Non-payroll and Payroll Expenditures – Significant Deficiency in Internal Controls over Compliance
Federal Program Information:
Funding Agency: U. S. Department of Health and Human Services
Title: Headstart Cluster
CFDA Number: 93.600
Federal Award Identification number: N/A
Pass Through Entity: N/A
Award Year: 2022
Condition: During our review of transactions, appropriate approval was not included in supporting documents. The following were noted:
• In 40 of 40 nonpayroll transactions tested, there was no indication of review by the Fiscal Officer on the GL report now was there any indication of review and approval by the Headstart Director on the Check Register.
• In 17 of 40 payroll transactions tested, the Fiscal Officer reviewed payroll hours and pay rates on the Payroll Review Form however this was dated on April 3rd or 4th of 2023 which is after the expenditure was paid out.
• In 11 of 40 payroll transactions tested, there was no indication that the Fiscal Officer reviewed payroll hours and pay rates on the Payroll Review Form
Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Questioned costs: None
Effect: The Entity may unintentionally make a purchase with federal funds that does not qualify which could lead to questioned costs and/or repayment to the Grantor agency. Cause: The Entity is not following its policies and procedures to ensure the appropriate approvals are being conducted prior to expenditure and documented.