Finding Text
2022-004 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance U.S. Department of Justice – Crime Victim Assistance – ALN 16.575 (Similar repeat finding, see 2021-003)
Criteria: Section 200.303 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a non-Federal entity to establish and maintain effective internal control over the Federal award that provides a 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 the specified guidance that requires proper segregation of duties by dividing key responsibilities among different people to reduce the risk of error or fraud. This should include separating the responsibilities for authorizing transactions, processing and recording them, reviewing the transactions, and handling any related assets. No one individual should control all key aspects of a transaction or event. In addition, this guidance also requires transactions and internal controls to be clearly documented, and the records should be properly maintained and readily available for examination.
Condition: The Organization did not have an effective internal control system in place in regard to approving invoices and maintaining documentation. Six of 40 disbursements tested were not approved by the Executive Director and there was no supporting documentation for 12 of the 40 tested.
Effect of Condition: $4,257 of the $15,460 expenditures tested are considered known questioned costs. $83,056 of a population of $301,651 are considered likely questioned costs due to not maintaining supporting documentation.
Cause of Condition: The Organization experienced personnel changes within key positions, which left the Organization understaffed to properly approve invoices and maintain documentation.
Recommendation: The Organization should follow its cash disbursements policy to maintain invoices and have them approved by appropriate levels of management prior to the issuance of checks.