New Mexico Rural Water Association, Inc.Non-Profit

Properly designed internal control policies address controls governing disbursements. Each disbursement should be supported with proper documentation (e.g. invoice, contract, etc.), include documentation of review and approval, and be properly recorded in the general ledger. The Association follows federal per diem standards regarding mileage reimbursement and overnight travel.

roperly designed internal control policies address controls governing disbursements. Each disbursement should be supported with proper documentation (e.g. invoice, contract, etc.), include documentation of review and approval, and be properly recorded in the general ledger.

Criteria: Sound internal control policies should include controls over disbursements; disbursements should include, at a minimum, supporting documentation, and documentation of review and approval of the disbursement. The Association uses the current federal per diem rates for mileage reimbursement and overnight travel. Condition: During our control and compliance test work over cash disbursements related to Circuit Rider, we tested ten disbursements (checks), which included six related to travel reimbursements and four other disbursements. The six travel reimbursement checks consisted of twenty separate travel reimbursement requests for mileage and other per diem to be reimbursed at federal per diem rates. The other disbursements were for non-travel items purchased. The error was as follows:         One of the twenty travel reimbursements tested contained incorrect federal per diem rates. The total errors were less than $14 in which one employee was underpaid. Cause: Proper internal control procedures are not maintained to ensure federal mileage per diems are updated accurately and calculated correctly. Effect: The Association is not consistently updating current federal mileage per diem rates for travel reimbursements. Questioned Costs: None. Context: Management did not update federal quarterly per diem rates accurately. The rate was .65 per mile instead of .655 per mile on the one travel tested. Recommendation: We recommend that management continue to review current per diems to ensure the per diem rates for mileage are accurate. There should be a system to check the federal per diem rates periodically to ensure the rates are updated timely. Management View and Corrective Action Plan: It is management's policy to update and distribute travel reimbursement forms with new mileage and per diem rates the first of each calendar year, and at any other time the rates may change. Federal per diem and travel rates will be verified on a monthly basis to ensure that the most current rates are being used. Formulas in travel vouchers will be checked to make sure that they have not been changed and that they calculate properly. A staff person will review all travel vouchers to verify that rates and calculations are correct prior to the vouchers being paid. Federal Award Findings and Questioned Costs (Non Compliance): None.

CRITERIA Sound internal control policies should include controls over disbursements; disbursements should include, at a minimum, supporting documentation, and documentation of review and approval of the disbursement. The Association uses the current federal per diem rates for mileage reimbursement and overnight travel. CONDITION During our control and compliance test work over cash disbursements related to Circuit Rider, we tested twelve disbursements (checks), which included six related to travel reimbursements and 14 other disbursements. The six travel reimbursement checks consisted of twenty-six days of mileage and other per diem to be reimbursed at federal per diem rates. The other disbursements were for non-travel items purchased. The errors were as follows: ? Three of the twenty-six travel reimbursements tested contained incorrect federal per diem rates. The total errors were less than $30 in which employees were underpaid. ? Two of the nontravel disbursements had no backup invoice. The total expenditure was $36.17 CAUSE Proper internal control procedures are not maintained to ensure federal mileage per diems are updated timely on travel reimbursement forms and other nontravel disbursements have invoices to support the disbursements. EFFECT The Association is not consistently using current federal mileage per diem rates for travel reimbursements and for nontravel invoices do not always support purchases made. QUESTIONED COSTS None. CONTEXT Management did not update federal quarterly per diem rates timely. The rates changed mid-year but management didn?t make the change until months later to the travel reimbursement forms. With regard to non travel disbursements, management did not follow up with employees to ensure invoices are received for purchases made. RECOMMENDATION We recommend that management continue to review current per diems to ensure the per diem rates for mileage are accurate. There should be a system to check the federal per diem rates periodically to ensure the rates are updated timely. Management should also require invoices to be turned in timely by employees making purchases. MANAGEMENT VIEW AND CORRECTIVE ACTION PLAN It is management?s policy to update and distribute travel reimbursement forms with new mileage and per diem rates the first of each calendar year, and any other time those rates are changed. Management will develop a procedure to check federal per diem rates monthly to ensure the most accurate rate is being used.

Sound internal control policies should include controls over disbursements; disbursements should include, at a minimum, supporting documentation, and documentation of review and approval of the disbursement. The Association uses the current federal per diem rates for mileage reimbursement and overnight travel. During our control and compliance test work over cash disbursements related to Circuit Rider, we tested twelve disbursements (checks), which included four related to travel reimbursements. The four travel reimbursement checks consisted of twenty days of mileage to be reimbursed at federal per diem rates. Three of the twenty travel reimbursements tested contained incorrect federal per diem rates. The total errors were less than $100 in which employees were underpaid.

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