Archaeology Southwest

Criteria: A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect material errors related to financial reporting. Condition: During the audit, we noted several transaction cycles for which there was a lack of approval as follows: Journal entries a) During our testing of 25 journal entries we noted that 20 were not properly reviewed and approved. There was adequate support for the entries present. We recommend that an individual review and approve all journal entries made, documenting that review on the support for the entry. Payroll b) During our testing of payroll, 9 out of 38 timesheets did not have documentation of review and approval by an appropriate individual. We recommend that supervisors review and approve their staff?s timesheets, and document that review. Perspective: The lack of approval increases the risk that an error may not be identified and corrected timely. Cause and effect: Due to a change in staff during the year, there was a failure to document proper approval, and as a result, the internal control system for financial reporting did not appear to be working as designed. The effect of the insufficient monitoring activities was an increased risk of misstatement of the financial statements and loss of assets, whether due to error or fraud. View of responsible officials: See Corrective Action Plan, which follows the Schedule of Expenditures and of Federal Awards.

Criteria and condition: Under Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR ? 200.318(a) and 2 CFR ? 200.318(c), a non-federal entity must use its own documented procurement procedures conforming to applicable State and local laws and regulations and the Uniform Guidance, and must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. For the year audited, we found that ASW had not adopted a procurement policy and had not implemented the minimum procedures described in the Uniform Guidance. This is a repeat of prior year finding 2019-002. Context: In the absence of a specific procurement policy indicating otherwise, for the purposes of our testing of compliance with the procurement requirements of the major federal program, the micro-purchase threshold was assumed to be $10,000 and the simplified acquisition threshold was assumed to be $250,000, as defined by 48 CFR ? 2.101. Since the Uniform Guidance imposes no pre-purchase activities related to micro-purchases, none of ASW?s purchases under this threshold were found to be noncompliant with the procurement requirements of the Uniform Guidance. No goods or services in excess of the simplified acquisition threshold were made using funds from the major federal program during the year ended December 31, 2020. We tested 37 non-payroll cash disbursements for purchases charged to the major federal program. These cash disbursements and 23 payroll disbursements resulted in a sample size of 60 expenditures for the Activities allowed or unallowed and Allowable costs/cost principles compliance requirements of the major federal program. The results of our testing indicated that the 37 cash disbursements were supported by corroborating documentation and the transactions were performed in accordance with ASW?s system of internal control applicable to all cash disbursements. However, as noted below, lack of a policy led to noncompliance with requirements related to small purchases. Cause: Since no policy governing compliance with the Procurement and Suspension and Debarment rules was approved and no procedures for ensuring compliance had been implemented, contractors used for work on the major program were not selected in a manner that complied with 2 CFR ? 200.300(a)(2) Procurement by small purchase procedures. Effect: Purchases under four contracts that were each individually over the micro-purchase threshold, totaling $70,055 in the aggregate, did not comply with 2 CFR ? 200.320(a)(2)(i), which requires that small purchases may only be made after price or rate quotations are obtained from an adequate number of qualified sources. However, we reviewed written proposals and documentation of approval by a BIA representative approving the contract; therefore, there are no questioned costs. Recommendation: We recommend that the board adopt a policy governing compliance with the federal rules for procurement and suspension and debarment pursuant to the Uniform Guidance. We further recommend that procedures be implemented to ensure that annual purchases of goods and services over the micro-purchase threshold of $10,000 for any vendor or contractor comply with the provisions of 2 CFR ? 200.318 ? 2 CFR ? 200.327. View of responsible officials and planned corrective actions: See Corrective action plan on page 36.

Criteria: Under Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR 200.318(a) and 2 CFR 200.318(c), a non-federal entity must use its own documented procurement procedures conforming to applicable State and local laws and regulations and the Uniform Guidance, and must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Condition: For the year audited, we found that ASW had not adopted a procurement policy and had not implemented the minimum procedures described in the Uniform Guidance. Cause and effect: Since no policy governing compliance with the Procurement and Suspension and Debarment rules was approved and no procedures for ensuring compliance had been implemented, contractors used for work on the major program were not selected in a manner that complied with 2 CFR 200.300(b) Procurement by small purchase procedures. Recommendation: We recommend that the board adopt a policy governing compliance with the federal rules for procurement and suspension and debarment pursuant to the Uniform Guidance. We further recommend that procedures be implemented to ensure that annual purchases of goods and services over the micro-purchase threshold for any vendor or contractor comply with 2 CFR 200.300.