Finding Text
Finding 2023-003 – Documentation of Costs and Vendor Invoices – Financial Reporting and Internal Controls
ALN 14.850 & 14.871– Noncompliance & Material Weakness
Criteria:
The Code of Federal Regulations Title 2 Part 200, The Uniform Administrative Guidance, gives requirements to non-Federal recipients of Federal grants relating to the documentation of records for grant expenditures. The financial management system of grantees must provide for the retention and access to records which relate to expenditures of program income. Costs must also meet certain criteria relating both to grant stipulations and to cost reasonableness and allowableness which are defined within the Uniform Guidance.
Condition & Cause:
Based on our discussions with management regarding purchasing, the Authority should be using purchase orders on all purchases except routine utilities and contracts. Our review of seventy-five (75) cash disbursements revealed that over $70,000 of goods and services were purchased without an applicable purchase order. Documentation to support purchases was limited to an invoice if one was provided. We also noted $4,984.05 of questioned costs, which was primarily due to the Authority only submitting a credit card statement to support credit card purchases. This often did not give any indication of what the purchase was for.
Effect:
Failure to provide proper cost support can lead to those costs being deemed ineligible and would require reimbursement from other Non-Federal sources.
Recommendation:
We recommend that the Authority amend policies and procedures to better facilitate effective purchasing controls. A clear audit trail should be maintained to ensure proper approval, as well as documentation to support the allowability and eligibility of costs.
Questioned Costs: $4,984.05
Repeat Finding: No
Was sampling statistically valid? Yes