Finding Text
2022-005 – Non Payroll Expenses- Material Weakness – Originated in 2019
Federal Program Information:
Funding Agency: U.S Department of Health and Human Services
FALN: 93.926
Federal Award Identification Number: H49MC00119-22-00
Pass Through Entity: State of Georgia Department of Human Services
Award Year: 2020-2024
Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award.
Additionally, regulations require that in order for activities and costs to be allowed under Federal awards, 45 CFR, part 75 all costs must be adequately documented.
Condition: The Organization lacked supporting documentation for certain non-payroll expenses and lacked evidence of review for certain non-payroll expenses. Due to the lack of supporting documentation or evidence of approval for payment, certain expenses could not be verified. Of the sixty (60) transactions examined eight (8) lacked supporting documentation and twenty five (25) lacked evidence of review, and approval for payment.
Effect: Management possibly did not expend funds in accordance with the approved detailed line-item budget and grant agreement and possibly expended funds which did not contribute to the objective set forth for the program (lack of approved invoices, lack of supporting documentation).
Cause: Expenses including approved invoices and/or supporting documentation were not properly maintained in part due to several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight.
Questioned Costs: Known questioned costs of $980 and likely questioned costs of $5,791 for Healthy Start.
Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all expenses include supporting documentation/invoice indicating nature of expense, amount, authorization and approval for payment.