Finding Text
Assistance Listing Number, Federal Agency, and Program Name 20.509, U.S. Department of Transportation, Formula Grants for Rural Areas
Federal Award Identification Number and Year MI 2020 008 07
Pass through Entity Michigan Department of Transportation (MDOT)
Finding Type Material weakness
Repeat Finding No
Criteria As outlined in 2 CFR 200.303, the Authority should have internal controls in place to ensure the accuracy of reimbursement requests submitted to the State.
Condition Currently one person prepares the reimbursement requests and no one reviews them for accuracy prior to submitting the requests to the State through the Operating Assistance Report (OAR) for reimbursement.
Questioned Costs None
Identification of How Questioned Costs Were Computed N/A
Context During our testing of the internal controls related to cash management, Plante & Moran, PLLC noted that there is no independent review of reimbursement requests prepared and submitted to the State by the Authority. Plante & Moran, PLLC did note, through our testing, that the amounts requested for reimbursement did tie to the expenditures recorded in the general ledger for the samples we selected, and, therefore, there are no questioned costs.
Cause and Effect Internal control procedures related to compliance with cash management did not exist during the year, which could have resulted in an error on the reimbursement request that did not get caught. Plante & Moran, PLLC did not note any errors on the samples selected for testing.
Recommendation Internal control procedures should be implemented to ensure all reimbursement requests are reviewed by an individual who is not charged with preparing those same source documents.
Views of Responsible Officials and Planned Corrective Actions Management will identify a new process for OAR assignment and submission. Currently, the OARs are prepared and submitted by the CFO due to staffing limitations. Nevertheless, the CFO will work to identify an individual within the finance department who has the skill set and capacity to prepare the OARs for CFO review prior to submission.