Finding Text
2022-004 U.S. Department of Agriculture Federal Financial Assistance Listing # 10.565 All Awards Federal Financial Assistance Listing # 10.568 All Awards Food Distribution Cluster Activities Allowed/Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria ? A good system of internal controls includes a documented process to ensure that expenses with the potential to be charged to a federal program are allowable within the Uniform Guidance and grant requirements. Condition ? During review of invoices, it was identified that there were three expense transactions that were charged to accounts that were later allocated to federal programs that did not meet the requirements to be allowable within the grant requirements or under Uniform Guidance or were missing proper documentation of approval. Cause ? Due to oversight by management and lack of documented control processes, costs that are considered unallowable within the grant requirements were included in accounts determined to be allocated to the program for expenditure. Effect ? The Organization?s internal controls failed to ensure proper documentation of review and approval and identify costs that are not allowed within under the program. Questioned Costs ? None Reported. Context/Sampling ? A nonstatistical sample of 60 expenses out of a population of over 250 were selected for testing of allocated expenses. 3 out of the 60 transactions tested had an error. An additional nonstatistical sample of 8 expenses directly charged to CSFP out of a population of 26 were selected for testing. 1 out of the 8 transactions tested had an error. Repeat Finding from Prior Year(s) ? Yes. Recommendation ? Management should implement internal controls to ensure all expenses are properly documented and approved to accounts that will be allocated at year-end are considered allowable. Views of Responsible Officials ? Management agrees with the finding.