Finding 610697 (2022-002)

2022-002 Insufficient Review and Approval of Federal Grant Expenditures Program: Coronavirus State and Local Fiscal Recovery Funds (AL# 21.027) Criteria or Specific Requirement - Key internal control procedures over federal grant expenditures should include a regular review of the expenditure listings for compliance with stated grant requirements. This review and approval should be performed by an individual from senior management who is separate from the individual responsible for the preparation of the grant expenditure listings. Condition - We noted that the list of specific expenditures for reimbursement under the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) federal grant was prepared and submitted to Knox County by an individual in the finance department without review or approval by a separate member of senior management with knowledge over such matters. This resulted in expenditures incurred outside of the allowable period for the grant initially being included and requiring the Zoo to have to amend its schedule of expenditures reported to the County to correct this issue. Cause and Effect - The lack of review is attributed to the small size of the senior management at the Zoo and reliance upon one individual in the finance department to prepare all reporting for grant management. The effect is there is a weakness in internal controls that could result in error or fraud.Questioned Costs and Prevalence - No matters regarding questioned costs are being reported. Management amended its schedule of expenditures reported to the County to correct this issue. Recommendations - We recommend that all federal and state grant expenditure reimbursements are reviewed and approved by a member of senior management who is separate from the individual(s) preparing the schedule. Such reviews should consider all grant compliance requirements and approval should be documented to prove that it occurred for proper audit trail. Management?s Response - All future requests for federal and state expenditure reimbursements will be reviewed and approved by a member of senior management that is not the individual preparing the request.