Finding Text
Finding 2021-012 Expenditure Approval - Activities Allowed and Unallowed, Allowable
Costs – Material Weakness in Internal Control Over Compliance
Agency Department of the Treasury
ALN 21.019
Program COVID-19 - Coronavirus Relief Fund
Award Year FY 2021
Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic
Development
Pass-Through Entity
Identifying Number
20-CRF-024
Criteria 2 CFR 200.303 requires that non-federal entities receiving federal awards
establish and maintain internal controls designed to reasonably ensure
compliance with federal statues, regulations, and terms and conditions of
the federal award.
Condition During our testing of nonpayroll transactions, we noted the following
exception: 17 out of 62 transactions sampled did not have documentation
of approval by management.
Cause Policies and procedures were not appropriately adhered to in certain
instances to ensure that the appropriate level of review and approval was
completed prior to charging costs to a federal program. Effect or potential
effect
Federal funds could be expended for unallowed activities and unallowed
costs.
Questioned costs None.
Context We tested a sample of 62 nonpayroll transactions totaling to $947,814 from
a population of 470 transactions totaling to $2,768,962. We noted 17
exceptions as noted in the condition. This is a condition identified per
review of the City’s compliance with the specified requirements not using
a statistically valid sample.
Identification as a
repeat finding
Not a repeat finding.
Recommendation Management should review policy and ensure documentation supporting
each expenditure, as well as of timely review and approval, will be
retained.
Views of
responsible officials
Management concurs with the finding. Management will implement policies
and procedures to ensure expenditures are reviewed timely and approved
prior to posting.