Finding 626292 (2022-003)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2023-04-25
Audit: 42353
Organization: Delta Area Transit Authority (MI)

AI Summary

  • Core Issue: There is a material weakness in internal controls over federal awards, specifically regarding documentation for expenses.
  • Impacted Requirements: Costs must be adequately documented to ensure they are allowable under federal awards, including proper review and authorization of invoices and payroll.
  • Recommended Follow-Up: Update policies to require documented review and authorization for all expenses, aligning with Uniform Guidance as soon as possible.

Finding Text

Finding Type: Material weakness, internal controls over federal award. Programs: Formula Grants for Rural Areas and Tribal Transit Program (Assistance Listing #20.509) Criteria: Costs must meet certain general criteria to be allowable under federal awards. One criterion is that the costs be adequately documented. Condition/Finding: 9 of the 40 accounts payable expenses that were selected for testing included documentation showing that an individual with knowledge of the transaction reviewed the invoice to: verify that it was necessary and reasonable for the performance of the federal award, verify that it was accurate in amount, authorize the voucher for payment, or establish the appropriate general ledger code for posting. Further, none of the 45 payroll expenses that were selected for testing included employee timecards reviewed and authorized for payment by their immediate supervisor. Cause: The Authority?s internal control policies currently do not require documented review and authorization of accounts payable vouchers or employee timecards. Effect: As a result of this condition, the Authority does not have adequate documentation demonstrating that an individual with appropriate knowledge of the transaction has reviewed that the transaction is allowable, free of error, and necessary and reasonable for the performance of the federal award. Questioned Costs: No costs have been questioned as a result of this finding. Recommendation: We recommend that the Authority update its policies and procedures to provide documented proof of review and authorization by management of all expenses. These policies and procedures should be updated to conform with the Uniform Guidance as soon as practical. View of Responsible Officials (Corrective Action): See corrective action plan.

Categories

Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 49842 2022-003
    Material Weakness Repeat
  • 49843 2022-004
    - Repeat
  • 49844 2022-003
    Material Weakness Repeat
  • 49845 2022-004
    - Repeat
  • 49846 2022-003
    Material Weakness Repeat
  • 49847 2022-004
    - Repeat
  • 49848 2022-003
    Material Weakness Repeat
  • 49849 2022-004
    - Repeat
  • 49850 2022-003
    Material Weakness Repeat
  • 49851 2022-004
    - Repeat
  • 49852 2022-003
    Material Weakness Repeat
  • 49853 2022-004
    - Repeat
  • 49854 2022-003
    Material Weakness Repeat
  • 49855 2022-004
    - Repeat
  • 626284 2022-003
    Material Weakness Repeat
  • 626285 2022-004
    - Repeat
  • 626286 2022-003
    Material Weakness Repeat
  • 626287 2022-004
    - Repeat
  • 626288 2022-003
    Material Weakness Repeat
  • 626289 2022-004
    - Repeat
  • 626290 2022-003
    Material Weakness Repeat
  • 626291 2022-004
    - Repeat
  • 626293 2022-004
    - Repeat
  • 626294 2022-003
    Material Weakness Repeat
  • 626295 2022-004
    - Repeat
  • 626296 2022-003
    Material Weakness Repeat
  • 626297 2022-004
    - Repeat

Programs in Audit

ALN Program Name Expenditures
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities $32,619
20.509 Formula Grants for Rural Areas and Tribal Transit Program $11,839