Audit 12195

FY End

2022-12-31

Total Expended

$2.64M

Findings

4

Programs

1

Organization: Interaction: American Council for Voluntary International Action (DC)

Year: 2022 Accepted: 2024-01-18

Auditor: Gelman Rosenberg & Freedman

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
8898	2022-003	Significant Deficiency	-	B
8899	2022-003	Significant Deficiency	-	B
585340	2022-003	Significant Deficiency	-	B
585341	2022-003	Significant Deficiency	-	B

ALN	Program	Spent	Major	Findings
98.001	Usaid Foreign Assistance for Programs Overseas	$80,941	Yes	1

Contacts

Name	Title	Type
PK22G5BXMRK6	Lawrence Smith	Auditee
2025526536	James Larson	Auditor
No contacts on file

Notes to SEFA

Title: Note 1. Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. InterAction has elected not to use the 10-percent de minimis indirect cost rate as allowed under Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the Federal award activity of InterAction under programs of the Federal Government for the year ended December 31, 2022. Information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Schedule presents only a selected portion of the operations of InterAction; accordingly, it is not intended to and does not present the financial position, changes in net assets or cash flows of InterAction.

Title: Note 2. Summary of Significant Accounting Policies Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. InterAction has elected not to use the 10-percent de minimis indirect cost rate as allowed under Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. InterAction has elected not to use the 10-percent de minimis indirect cost rate as allowed under Uniform Guidance.

Finding Details

Finding 2022-003

Finding 2022-003: Payroll Allocations Information on the Federal Programs: 98.001 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): 2 CFR 200.430 Compensation – personal services, section (i) indicates that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that such records be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: InterAction has a timekeeping system in place that provides for employees to record hours worked to specific cost objectives, including to US Government grants. We reviewed the allocation system during the audit, and noted that it automatically and accurately calculates values to be charged to each project reflective of the time recorded by employees. However we noted that in several cases the allocation amounts as per the timekeeping system were different from the amounts ultimately recorded within InterAction's general ledger. While the differences were not significant, these discrepancies indicate a deficiency in the internal controls around recording of salary expenditures to projects. Cause: The primary cause appears to be human error, and the result of manual recordkeeping. Effect or Potential Effect: Salary expenditures that are not charged in accordance with the standards referenced above may be questioned or disallowed by the donor. Questioned Costs: Undetermined Context: Our procedures included testing a sample of 40 salary transactions. We noted variances of the nature described above for 36 of the 40 samples tested. The issue appears to be systemic. Identification as a Repeat Finding, if Applicable: N/A. Recommendation: We recommend that management revisit its procedures for transferring data from the timekeeping system to the general ledger and implement proper internal controls to ensure that the amounts of salary expenditures charged to grants in the general ledger reconcile to the amounts calculated by the timekeeping system.

Finding 2022-003

Finding 2022-003: Payroll Allocations Information on the Federal Programs: 98.001 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): 2 CFR 200.430 Compensation – personal services, section (i) indicates that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that such records be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: InterAction has a timekeeping system in place that provides for employees to record hours worked to specific cost objectives, including to US Government grants. We reviewed the allocation system during the audit, and noted that it automatically and accurately calculates values to be charged to each project reflective of the time recorded by employees. However we noted that in several cases the allocation amounts as per the timekeeping system were different from the amounts ultimately recorded within InterAction's general ledger. While the differences were not significant, these discrepancies indicate a deficiency in the internal controls around recording of salary expenditures to projects. Cause: The primary cause appears to be human error, and the result of manual recordkeeping. Effect or Potential Effect: Salary expenditures that are not charged in accordance with the standards referenced above may be questioned or disallowed by the donor. Questioned Costs: Undetermined Context: Our procedures included testing a sample of 40 salary transactions. We noted variances of the nature described above for 36 of the 40 samples tested. The issue appears to be systemic. Identification as a Repeat Finding, if Applicable: N/A. Recommendation: We recommend that management revisit its procedures for transferring data from the timekeeping system to the general ledger and implement proper internal controls to ensure that the amounts of salary expenditures charged to grants in the general ledger reconcile to the amounts calculated by the timekeeping system.

Finding 2022-003

Finding 2022-003: Payroll Allocations Information on the Federal Programs: 98.001 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): 2 CFR 200.430 Compensation – personal services, section (i) indicates that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that such records be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: InterAction has a timekeeping system in place that provides for employees to record hours worked to specific cost objectives, including to US Government grants. We reviewed the allocation system during the audit, and noted that it automatically and accurately calculates values to be charged to each project reflective of the time recorded by employees. However we noted that in several cases the allocation amounts as per the timekeeping system were different from the amounts ultimately recorded within InterAction's general ledger. While the differences were not significant, these discrepancies indicate a deficiency in the internal controls around recording of salary expenditures to projects. Cause: The primary cause appears to be human error, and the result of manual recordkeeping. Effect or Potential Effect: Salary expenditures that are not charged in accordance with the standards referenced above may be questioned or disallowed by the donor. Questioned Costs: Undetermined Context: Our procedures included testing a sample of 40 salary transactions. We noted variances of the nature described above for 36 of the 40 samples tested. The issue appears to be systemic. Identification as a Repeat Finding, if Applicable: N/A. Recommendation: We recommend that management revisit its procedures for transferring data from the timekeeping system to the general ledger and implement proper internal controls to ensure that the amounts of salary expenditures charged to grants in the general ledger reconcile to the amounts calculated by the timekeeping system.

Finding 2022-003

Finding 2022-003: Payroll Allocations Information on the Federal Programs: 98.001 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): 2 CFR 200.430 Compensation – personal services, section (i) indicates that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that such records be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: InterAction has a timekeeping system in place that provides for employees to record hours worked to specific cost objectives, including to US Government grants. We reviewed the allocation system during the audit, and noted that it automatically and accurately calculates values to be charged to each project reflective of the time recorded by employees. However we noted that in several cases the allocation amounts as per the timekeeping system were different from the amounts ultimately recorded within InterAction's general ledger. While the differences were not significant, these discrepancies indicate a deficiency in the internal controls around recording of salary expenditures to projects. Cause: The primary cause appears to be human error, and the result of manual recordkeeping. Effect or Potential Effect: Salary expenditures that are not charged in accordance with the standards referenced above may be questioned or disallowed by the donor. Questioned Costs: Undetermined Context: Our procedures included testing a sample of 40 salary transactions. We noted variances of the nature described above for 36 of the 40 samples tested. The issue appears to be systemic. Identification as a Repeat Finding, if Applicable: N/A. Recommendation: We recommend that management revisit its procedures for transferring data from the timekeeping system to the general ledger and implement proper internal controls to ensure that the amounts of salary expenditures charged to grants in the general ledger reconcile to the amounts calculated by the timekeeping system.