Finding Text
Activities Allowed or Unallowed 2019-017 Grant Title: Water and Waste Disposal Systems for Rural Communities Federal Award Number and Year: 2019 CFDA#: 10.760 Federal Agency: US Department or Agriculture CONDITION: Invoices or other supporting documentation was not available for all expenditures. CONTEXT: There were twenty-seven expenditure transactions for the Water and Waste Disposal Systems for Rual Communities. Twelve expenditures, or 44% of the population size, did not have invoices or supporting documentation available. CRITERIA: Proper internal controls include maintaining an adequate filing systems in order to safeguard records and documents and procedures that ensure all invoices and supporting documentation are available. Additionally, Title 7 U.S. Code of Federal Regulations (CFR) Part 1780, Water and Waste Loans and Grants §1780.47 states, in part, that: (c) Record Retention. Each borrower shall retain all records, books, and supporting material for 3 years after the issuance of the audit or management reports. Upon request, this material will be made available to RUS, Office of the Inspector General (OIG), United States Department of Agriculture (USDA), the Comptroller General, or to their assignees. QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures. EFFECT: Auditors were unable to determine the allowability of certain expenditures and controls over supporting documentation were not adequate to prevent and detect unauthorized disbursements. This issue contributed to the modified opinion on compliance for the Water and Waste Disposal Systems for Rural Communities program. REPEAT FINDING: No RECOMMENDATION: Municipal officials should establish procedures to require all expenditures be adequately documented and supporting documentation, be available for review. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: A correction plan will be put in place to ensure that all invoices are kept for the proper and legal amount of time.