Finding Text
Criteria: The Organization is required to implement internal controls over financial reporting to ensure compliance with federal program requirements and to ensure these controls are operating as designed. CONDITION: The Organization did not follow its documented procedures for allocating costs. CONTEXT: Documented procedures state that actual hours worked for each month are used as the basis for expense allocations. During dual purpose tests of controls and compliance over direct disbursements, we noted that spreadsheets had been updated to allocate costs based on annual hours instead of monthly hours. Additionally, the basis for the annual hours used could not be determined. EFFECT: This circumstance may result in improper expense allocations to federal grants. CAUSE: The former Finance Director changed the allocation spreadsheets without proper approvals. RECOMMENDATION: The Organization ceased to be the administrative agent for Virginia Career Works - Piedmont Region, the recipient of the federal grants, effective June 30, 2023. We recommend that management communicate the necessary changes to the new organization. VIEWS OF RESPONSIBLE OFFICIALS: The Organization concurs with the finding.