Finding 966338 (2023-001)

Material Weakness Condition: Our audit revealed a control deficiency concerning missing documentation related to expenditures incurred under the federal grant for the Authority’s payroll transactions. During our test of allowable activities and allowed costs, we found 12 instances where essential documentation, such as employee time sheets were absent for transactions involving federal funds in fiscal year 2023. Questioned Costs: Related to the lack of supporting documentation noted above, we identified $21,052 of known question costs in relation to the federal program noted above. Criteria: Per 2 CFR Part 200 Subpart D Section 200.334, Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. Cause: The authority did not have proper procedures in place to maintain documentation for financial transactions. Potential Effect: Failure to maintain underlying documentation and support of financial transactions can increase the risk of fraud, result in financial statement misstatements, and expenditures that are not for an allowable activity as described in 2 CFR Part 200 Appendix XI Section 5307. Recommendation: We recommend the Authority maintain all timesheets and documentation of work provided for all financial transactions and records be maintained in an orderly manner to support all transactions.