National Council for History Education, Inc.

Expense Documentation - Condition: During testing of federal expenditures, we noted 2 out of 40 expense transactions tested that lacked supporting documentation to validate the expense. Additionally, during testing of cash management compliance, we noted 4 out of 6 reimbursement requests tested included expenditures that lacked supporting documentation. Criteria: Per 2 CRF section 200.403(g), costs must be adequately documented. Cause of Condition: This issue was caused by inadequate policies and weakened internal controls. Effect: Failure to retain proper supporting documentation could result in noncompliance with 2 CFR 200.403(g) and/or questioned costs. Recommendation: We recommend all disbursements be supported with a receipt or invoice detailing the date, amount, and business purpose of the expenditure. This procedure will help ensure all expenditures are properly recorded and documented. Furthermore, all receipts should specify the purchase and, if for a meal purchase, the specific attendees who benefited from the expense in order to be in compliance with IRS expense guidelines. NCHE should also establish a policy regarding missing receipts. Management Response: Management accepts the finding and recommendation.

Condition: During testing of federal expenditures, we noted 5 out of 40 expense transactions tested thatlacked supporting documentation to validate the expense. Criteria: Per 2 CRF section 200.403(g), costs must be adequately documented. Cause of Condition: This issue was caused by inadequate policies and weakened internal controls. Effect: Failure to retain proper supporting documentation could result in noncompliance with 2 CFR 200.403(g) and/or questioned costs. Recommendation: We recommend all disbursements be supported with a receipt or invoice detailing the date, amount, and business purpose of the expenditure. This procedure will help ensure all expenditures are properly recorded and documented. Furthermore, all receipts should specify the purchase and, if for a meal purchase, the specific attendees who benefited from the expense in order to be in compliance with IRS expense guidelines. NCHE should also establish a policy regarding missing receipts. Management Response: Management accepts the finding and recommendation.

Condition: During testing of grant reimbursements, we noted NCHE received reimbursement for program costs before it paid for those costs. Criteria: In accordance with 2 CFR 200.305(b)(3), program costs must be paid by non-federal entity funds before submitting a reimbursement request. Cause of Condition: NCHE does not have adequate polices in place to ensure program costs have been paid before a reimbursement request is submitted. Effect: The lack of adequate policies may result in noncompliance with federal program cash management requirements. Recommendation: We recommend NCHE implement policies and procedures that outline the process for requesting reimbursement in line with 2 CFR 200.305(b)(3). Uniform Guidance states that a non-federal entity must distribute funds for program purposes before requesting payment from the federal awarding agency or pass through entity. Management Response: Management accepts the finding and recommendation.

Criteria and Condition: The Organization is required to properly retain and store documentation surrounding grant reimbursements. The Organization should have strong policies and internal controls in place to ensure reimbursement requests are in line with 2 CFR 200.305(b)(3). Cause: This was caused by inadequate policies and weakened internal controls. Effect: The lack of adequate documentation may result in the Organization being non-compliant with 2 CFR 200.305(b)(3). Not having strong policies in place and weakened internal controls could result in questioned costs. Questioned Costs: There are no questioned costs as a result of this finding. Perspective Information: The finding is a systemic program and was identified in all cases of the testing sample. The sample was a statistically valid sample. Recommendation: We recommend the Organization implement policies and procedures that outline the process for requesting reimbursement in line with 2 CFR 200.305(b)(3). Pursuant to 2 CFR 200.305(b)(3), program costs must be paid by non-federal entity funds before submitting a payment request. Uniform Guidance states that a non-federal entity must distribute funds for program purposes before requesting payment from the federal awarding agency or pass through entity. We recommend the Organization ensure proper documentation is retained to serve as proof for a reimbursement request. Views of Responsible Officials: The Organization agrees with the finding and will adhere to the planned corrective action.