Audit on Selected Internal Controls at DNA-People’s Legal Services

Report Information

Date Issued
Report Number
AU 25-02
Report Type
Audits
Joint Report
No
Agency Wide
No (location specific)
Location(s)

Window Rock, AZ
United States

Questioned Costs
$2574
Funds for Better Use
$0

Recommendations

Date Issued

Update the DNA Accounting Manual to align with LSC requirements in 45 C.F.R. 1631.12(d) that prohibit giving or selling assets to DNA employees and/or Board members.

Date Issued

Add asset disposal documentation requirements to the DNA Accounting Manual to ensure that documentation is maintained for each disposed asset.

Date Issued

Review the periodic inventory and verify that the inventory reconciles to the general ledger. Document review with a signature and date or initials and date.

Date Issued

Update the current DNA Company Vehicle policy to require logging all use by all employees.

Date Issued

Update the current DNA Company Vehicle policy section on permissible use to:
Provide more detail on what constitutes personal use,
Clearly define commuting to/from work as personal use, and
Inform employees that the value associated with personal use…

Date Issued

Work with DNA's Board of Directors to eliminate the Executive Director's ability to make discretionary changes to the current DNA Company Vehicle policy.

Date Issued

Work with DNA's Board of Directors to update the DNA Accounting Manual to require Board of Director approval for all DNA policy changes.

Date Issued

Update the company vehicle policy with a requirement that vehicle users maintain complete vehicle use logs, including date, time, and purpose of the trip.

Date Issued

Update the Company Vehicle Use policy to:
Require documentation of monthly vehicle use log review, and
Document the review to include the signature of the reviewer and the date of review.

Date Issued

Update the DNA Accounting Manual to include all LSC cost allocation requirements, including cost allocation documentation requirements.

Date Issued

Update the cost allocation section of the DNA Accounting Manual to include and comply with all LSC requirements. The updates should include:
A list of the supporting documentation to be retained for cost allocations; and
A requirement that cost…

Date Issued

Along with the DNA Board of Directors decide whether DNA will allocate costs monthly or quarterly and update their Accounting Manual accordingly to include the timeframe within which the cost allocation must be completed.

Date Issued

Work with the Board President to enhance or implement procedures to ensure that the Board President reviews, approves, and adequately documents their approval of the Executive Director's credit card expenditures with a signature and date.

Date Issued

Implement controls to ensure that entries for transactions are adequately referenced in the general ledger, and source documents are traceable to the general ledger. Grant codes should be coded in the accounting system and included with supporting…

Date Issued

Implement a process to ensure that only LSC-allowable expenses are allocated to LSC, in accordance with LSC requirements and guidance.

Date Issued

Update the DNA Accounting Manual to include procedures for obtaining LSC approvals when using more than $25,000 of LSC funds for contracts, purchases/leases of personal property, or capital improvements.

Date Issued

Implement procurement documentation procedures ensuring that required documents - including but not limited to: request for approvals, competitive bids and quotes, sole source justifications, and documentation of any deviation from the procurement…

Date Issued

Update the DNA Accounting Manual to require that contract documents must be maintained in a central file according to the record retention policy post expired contract terms.

Date Issued

Establish and maintain a proper recordkeeping system that enables DNA to maintain contract files and perform regular backups of electronic records and systems stored offsite or in a virtual environment with easy-to-use restoration options.

Date Issued

Implement procedures to ensure that invoices are itemized according to the terms of the contract before payment is disbursed.
DNA should be able to verify the total amount that is billed for services and confirm the deliverables received.
Additionally…

Date Issued

Obtain information from the accounting services contractor and conduct a review to determine if they were billed for reconciliation support services that they did not receive during the audit period and recoup any such expenses.

Date Issued

Implement procedures to ensure adequacy of allocations and general ledger classifications.

Date Issued

Implement procedures for adequate review of case timekeeping to ensure the proper allocation of attorney fees.

Date Issued

Update the DNA Accounting Manual to include a section on costs that are unallowable per LSC regulations, including how to identify and address unallowable costs.

Date Issued

Provide training on identifying and recording unallowable costs to DNA accounting staff and any other personnel responsible for approving purchases or disbursements.

Date Issued

Update the DNA Accounting Manual to assign bank reconciliation duties ensuring segregation of duties so employees who initiate or transmit electronic transactions, have no access to cash, are not check signers, and have no bookkeeping duties.

Date Issued

Establish adequate segregation of duties to:
Ensure cash receipts procedures require that two employees open the mail, and
Ensure the cash receipts log is signed and dated by the preparer and the reviewer.

Date Issued

Establish adequate segregation of duties to ensure employees who take deposits to the bank:
Are not involved with opening the mail or recording cash receipts, and
Do not have access to the DNA Accounting System.

Date Issued

Implement procedures to ensure that bank reconciliations are signed and dated on the date the reconciliation was performed and the bank reconciliation review was performed and documented.

Date Issued

Ensure that outstanding checks are investigated and resolved within 90 days, according to the grantee policy.

Date Issued

Discuss with the DNA Board of Directors whether DNA should maintain petty cash funds or implement a Purchase Card to replace petty cash funds.

Date Issued

If DNA continues using petty cash funds:
Update the DNA Accounting Manual to comply with the requirements in Section 3.2.5 of the LSC Financial Guide,
Correct its general ledger to show the accurate petty cash fund balance by office,
Eliminate the…

Date Issued

Update the DNA Accounting Manual and Employee Manual, as required, to include:
A policy prohibiting checks made payable to cash.
A local travel policy with the elements required by the LSC Financial Guide.
The LSC Financial Guide requirements for…

Date Issued

Implement controls to ensure that entries for transactions are adequately referenced in the general ledger, and source documents are traceable to the general ledger. Grant codes should be coded in the accounting system and included with supporting…

Date Issued

Strengthen procedures over management reporting and budgeting to ensure that:
Procedures are implemented to prepare monthly management reports for management/director review by the required due date.
The required LSC reports are prepared, including…

Date Issued

Update the DNA Accounting Manual to include a Statement of Cash on Hand as a required monthly report.

Date Issued

Implement procedures to ensure that budgets are prepared and approved by the Board prior to the start of each fiscal year. Also, ensure that there is documentation of Board approval.

Date Issued

Ensure the budget is fully documented by location, funding source and program, as stipulated in the DNA Accounting Manual.

Date Issued

Implement procedures to ensure that an individual independent of the preparation or distribution of payroll, reviews payroll prior to processing. Additionally, ensure that this review is documented by signature and date.

Date Issued

Strengthen procedures to ensure that client trust bank reconciliations and associated individual client trust ledgers are reconciled monthly and in a timely manner.