Finding Text
Program Information:
See the audit finding for chart/table
Criteria or specific requirement:
The cost principles in 2 CFR part 200, subpart E (Cost Principles), prescribe the cost accounting requirements associated with the administration of Federal awards by:
a. States, local governments, and Indian tribes
b. Institutions of higher education (IHEs)
c. Nonprofit organizations
Except where otherwise authorized by statute, cost must meet the following general criteria in order to be allowable under Federal awards;
4. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.
7. Be adequately documented.
AL #21.027
Recipients may use Fund payments for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021 (codified as 42 U.S.C. § 802 and 42 U.S.C. § 803 respectively), Treasury’s Interim Final Rule at 31 C.F.R. §§ 35.7 and 35.8.
Condition/Context:
During testing the following was noted:
AL # 15.021
• 1 out of 13 non-payroll transactions was missing supporting documentation.
AL # 15.033
• 1 of 12 IIIs did not have approval documented or support provided.
• 6 of 47 payroll transactions did not have a timesheet provided.
AL # 93.441
• 6 of 9 non-payroll samples did not have adequate documentation.
• 4 of 51 payroll samples did not have an approved timesheet provided.
• 7 of 51 payroll samples did not use the approved payrate.
• 1 of 51 samples did not have a PAN to verify the approved rate.
AL # 93.600
• 1 of 60 transactions was missing supporting documentation.
AL # 21.027
• 2 of 2 III’s were missing sufficient documentation to support the cost. Additionally, one of these transactions appeared to be a principal payment on a loan.
• 49 of 54 non-payroll samples were missing sufficient documentation to support the cost.
[X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness
Cause:
There were not sufficient controls implemented to appropriately review and monitor activity and ensure amounts were properly recorded in the general ledger.
Effect:
Disbursement transactions are being processed without proper documentation.
Questioned Costs:
AL # 15.021 - Known – N/A, the known plus likely questioned costs did not exceed $25,000, therefore no questioned costs are reported.
AL # 15.033 - Known – N/A, the known plus likely questioned costs did not exceed $25,000, therefore no questioned costs are reported.
AL # 93.441 - Known - $28,309
AL # 93.600 - Known – $3,363
AL # 21.027 - Known - $1,094,753
Repeat Finding:
Yes – 2020-010 (AL #’s 15.021, 15.033, 93.441, and 93.600).
Recommendation:
We recommend the Department update its policies to mention the retention aspect of disbursement processing and follow their written policies.
Views of Responsible Officials and Planned Corrective Action:
Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.