Finding Text
Finding 2022-001 ? Internal Controls over Allowable Costs, Activities Allowed and Special Tests and Provisions Material Weakness and Material Noncompliance Assistance Listing Number: 97.036 COVID-19 Disaster Grants ? Public Assistance Criteria: 2 CFR 200.303 requires that a non-federal entity must ?(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (?COSO?). Condition: During our testing of compliance and internal controls over allowability and special tests reporting of expenditures, it was determined that internal controls over allowable costs and activities allowed and special tests reporting are not designed to prevent and detect unallowable expenditures from being submitted for reimbursement. Consequently, we noted approximately $8,550 of ineligible expenditures were submitted on the reimbursement request. Questioned Costs ? $8,550 Context: Our testing noted approximately $8,550 of unallowable expenditures, out of a sample tested approximating $68,000, that were reported on the reimbursement request for Disaster Grants- Public Assistance. Our sample was not intended to be statistically valid. Cause: Lack of effectively designed and implemented internal controls over allowability of expenditures and special tests and provisions. Effect: Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be relied upon to effectively prevent or detect noncompliance. Thus, unallowable expenditures may be submitted for reimbursement. Recommendation: Effective supervisory review internal controls over allowable costs, activities allowed and special tests and provisions should be implemented to ensure expenditures submitted for reimbursement meet the criteria established in the terms and conditions. Identification of prior year finding: N/A Management Response: See management?s corrective action plan included at the end of the report.