Finding 7789 (2022-007)

U.S. Department of the Treasury Passed through State of Arizona, Maricopa County (Maricopa County), Federal Financial Assistance Listing #21.027, PE386182260A4 2022, Coronavirus State and Local Fiscal Recovery Funds Period of Performance Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controls over the federal awards that provide assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the conditions of the federal award. A complete system of internal controls requires all expenditures be properly approved and supported by appropriate documentation. In addition, all expenditures charged to the federal program are required to be reviewed to ensure they are within the grant award’s period of performance. Condition: The Foundation’s internal controls were not designed to properly ensure an review over program expenditures and that they were incurred within the grant award’s period of performance. Cause: The Organization has limited staffing and did not have proper controls in place relating to review of expenditures charged to the program to ensure they were incurred within the period of performance. Effect: Lack of a formal review control over period of performance requirements increases the risk that expenditures could be submitted under the grant that are incurred outside of the period of performance. Questioned Costs: None reported. Context: A nonstatistical sample of 60 transactions were selected for testing, of which 51 out of 60 expenditures tested lacked proper documentation of review and approval with period of performance requirements. Repeat Finding from Prior Years: No Recommendation: We recommend the Foundation’s management implement a process that allows for expenditures claimed for reimbursement under federal awards to be reviewed to ensure those expenditures are incurred within the grant award’s period of performance requirements. Views of Responsible Officials: Management agrees with the finding.