CLG 006 Certifying Officer Practice Exam

What happens if supporting documentation for a payment is not retrievable?

1. The payment will still be processed

2. Pecuniary liability may be invoked

3. It may lead to auditing complications

4. Both B and C are correct

The correct answer is: Both B and C are correct

When supporting documentation for a payment is not retrievable, it can result in significant consequences for the entity involved. Specifically, invoking pecuniary liability means that an official may be held personally accountable for the payment, as the lack of documentation raises questions about the legitimacy and authorization of the expenditure. This situation emphasizes the importance of maintaining thorough and accessible records to protect officials from potential financial liability. Furthermore, the absence of supporting documentation can lead to auditing complications. Audits rely heavily on documentation to verify that expenditures are appropriate, authorized, and substantiated. Without this documentation, auditors may find it challenging to assess the accuracy and validity of the payments, potentially leading to findings of non-compliance, resulting in further scrutiny or corrective actions. In summary, the unavailability of supporting documentation encompasses both the potential for pecuniary liability and the risk of auditing difficulties, making the combination of these two impacts significant.