Finding Text
Significant Deficiency: Finding 2022-001 Information on the Federal program: The finding relates to Federal funds received from the U.S Department of Defense, for fiscal year 2022, under the Research and Development Cluster, Assistance Listing Number 12.630, relating to cost principles compliance requirement. Criteria: Government Auditing Standards require agencies to have internal controls in place to ensure all transactions are properly recorded in the correct year. Condition: During our testing of twenty-five cash disbursement transactions, we noted three instances totaling $1,132 that AFFOA did not record the expenses in their proper year. Cause: During fiscal year 2022, AFFOA experienced turnover within their finance department. Accordingly, AFFOA?s internal controls and processes were not performed in a timely manner. Questioned Costs: None Recommendation: AFFOA should develop and implement policies and controls for monitoring year-end transactions as well as funding from the Federal and state governments to identify, document and track accurate expenditures for each year. The development and utilization of these controls and polices will reduce the risk of noncompliance as well as the risk that financial statements could be materially misstated. Repeated finding: No Management?s Response: We concur with the recommendation, particularly as it pertains to credit card transactions. During the current fiscal year, we have increased training and provide weekly reminders to all AFFOA employees that expense reports, including those related to credit card purchases, are to be submitted to accounting in a timely manner (within 30 days of travel). In addition, we are reconciling the ?Clearing? account monthly. This account bridges the credit card payments and the employees? expense reports. With a monthly reconciliation of this account, we are better able to follow up with employees with overdue expense reports, and we will have a precise basis for any necessary accruals related to credit card purchases at year-end.