Finding Text
Regional Information Sharing Systems Assistance Listing No. 16.610 Grant No. 15PBJA-21-GG-00349-RISS Grant Period: Year ended December 31, 2022 Type of Finding: Significant deficiency in internal control over compliance, other matters Compliance Requirement: Program Income, Reporting Questioned Costs: Cannot be determined Condition: Program income was not accounted for consistently throughout the year, correctly reported in financial reports, or spent prior to drawdowns. Criteria: Program income may only be used for allowable program costs and must be spent prior to drawdowns. Effective internal controls should include procedures to ensure financial information reported in required financial reports is accurate prior to submission. Context: Total program income for the year was $397,230. In testing two of four quarterly financial reports, we noted that for Q1, $25,000 of program income from Q4 2021 was reported in Q1 2022, and Q1 program income of $38,242 was not reported. For Q3, we were unable to verify the program income reported as amounts did not agree with supporting documentation or the general ledger. Restricted asset forfeiture funds received and forwarded to the custodian of $12,200 were incorrectly recorded as program income and expense, while asset forfeiture funds used of $3,013 were netted against the expense thus did not agree with the Schedule of Federal of Awards. Cause: The internal control policies and procedures regarding program income and review and approval of spreadsheets summarizing program income were not followed. These spreadsheets were sometimes prepared using the cash basis of accounting and sometimes using the accrual basis, resulting in inconsistent reporting. Also, errors in the spreadsheets were noted. Internal control policies requiring review of quarterly financial reports before submission were not followed. Effect: Program income of $25,000 earned in May 2022 was not spent as of the end of the year. Errors in program income resulted in audit adjustments. Quarterly financial reports were inaccurate with regard to program income. Recommendation: Program income should be consistently reported in the general ledger when earned. In addition, we recommend that procedures be developed to strengthen internal controls over program income, the use of program income, and the reporting of program income. WSIN should consistently follow its policies regarding review of quarterly reports prior to submission.