Finding Text
Finding 2023-002: Allowable Activities – Disbursements and Approvals of Disbursements
Program Names and Awarding Agencies: Coronavirus State and Local Fiscal Recovery Funds, 21.027, passed through Michigan Housing Development Authority and City of Detroit
Twenty First Century Learning, 84.287, direct award from U.S. Department of Education
Community Services Block Grant, 93.569, passed through Michigan Department of Health and Human Services and direct award from U.S. Department of Health and Human Services
Finding Type: Material Weakness on Internal Controls over Compliance and Noncompliance
Questioned Cost Amount: Based on deviations noted in our testwork the projected likely questioned
costs resulting in noncompliance are as follows:
Coronavirus State and Local Fiscal Recovery Funds, 21.027: $112,742
Twenty First Century Learning, 84.287: $28,653
Context / Criteria: Wayne Metropolitan Community Action Agency and Affiliates’ procurement policy outlines requirements for approvals based on the expenditure amount. Additionally, disbursements are required to be supported by a sufficient level of documentation to ensure the expense was incurred and should have a sufficient level of approvals to ensure the expense is able to be paid and charged to the correct account.
Condition: During our disbursement testing we noted the following that suggest a deficiency in internal control and noncompliance:
Coronavirus State and Local Fiscal Recovery Funds, 21.027: 4 out of 40 disbursements were not supported by receipts or invoices that matched the disbursement amount.
Twenty First Century Learning, 84.287: 3 out of 40 disbursements were not supported by receipts or invoices that match the disbursement amount or was not budgeted for.
During our disbursement testing we noted the following that suggest a deficiency in internal control:
Twenty First Century Learning, 84.287: 7 out of 40 disbursements lacked a sufficient level of approvals according to Wayne Metropolitan Community Action Agency and Affiliates’ procurement policy.
Community Services Block Grant, 93.569: 10 of 40 disbursements lacked a sufficient level of approvals according to Wayne Metropolitan Community Action Agency and Affiliates’ procurement policy.
Cause / Effect: Wayne Metropolitan Community Action Agency and Affiliates did not maintain sufficient internal controls over disbursements to ensure expenses were approved according the procurement policy and a sufficient level of documentation was not maintained or available to support the expense charged to the awards above. The effect of this finding could have a material impact on the Wayne Metropolitan Community Action Agency and Affiliates compliance with other federal and non-federal awards.
Recommendation: We recommend Wayne Metropolitan Community Action Agency and Affiliates update its procurement policy to reflect its preferred internal controls to ensure a sufficient level of approvals occur and documentation is accumulated before a disbursement is made. The procurement policy should be disseminated to all persons involved in purchasing, approving and paying of vendor invoices.
Views of Responsible
Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.