Finding 964718 (2023-008)

Department of Interior Federal Financial Assistance Listing 15.042 Indian School Equalization Allowable Costs/Activities Allowed or Unallowed Material Weakness in Internal Control Over Compliance and Immaterial Instance of Noncompliance Criteria – A good system of internal control includes an adequate system for ensuring all expenditures are properly recorded and allowable under the related federal grant in accordance with 2 CFR 200.430(i). Condition – In our testing of allowable costs and activities we noted five instances where payroll expenditures were not paid in accordance with the employment letter. Cause – Procedures are not in place to adequately identify unallowable costs or activities. Effect – A lack of internal controls over allowable costs and activities could result in improper use of federal funds and non-compliance with the provisions of applicable grant requirements. Questioned Costs – None reported Context/Sampling – A nonstatistical sample of 60 transactions out of 4,205 total transactions were selected for testing, which accounted for $98,689 of $1,818,900 of federal program expenditures. Repeat Finding from Prior Years – No. Recommendation – The School should review internal control procedures to ensure federal expenditures are being properly reviewed for unallowable costs and activities. Views of Responsible Officials – There is no disagreement with the audit finding