Finding Text
2023-002
Agency: U.S. Department of Justice, passed through Michigan Department of Health and Human Services
Federal Assistance Listing Number: 16.575, Crime Victim Assistance
Criteria: The Organization is required to maintain effective internal controls over compliance to support that transactions are properly recorded and accounted for in order to permit the preparation of reliable financial statements and federal reports.
Statement of Condition: The Organization did not have timely approval of non-payroll expenditures to support preparation of reliable financial reports to grantors.
Questioned Costs: None noted.
Context: During our testing, we identified sixteen (16) out of sixty (60) costs in which the corresponding approval was obtained thirty (30) or more days from the date the expense was incurred per the general ledger.
Effect: Without timely review of allowable costs, the Organization could submit inaccurate or inappropriate monthly reports to the grantor for reimbursement.
Cause: The Organization did not have effective controls in place to timely review and approve expenditures charged to federal programs.
Recommendation: The Organization should review their internal control processes to ensure timely review and approval of all expenditures, including those charged to federal awards, to facilitate accurate financial and grant reporting.
Management's Response: