Finding Number: 2021-002; Finding Type: Federal award finding and financial statement finding; Federal Assistance Listing No.: 1) 16.556 2) 93.591; Program Names: 1) State Domestic Violence and Sexual Assault Coalitions 2) Family Violence Prevention and Services/State Domestic Violence Coalition; Federal Agencies: 1) U.S. Department of Justice 2) U.S. Department of Health and Human Services; Pass-Through Entity: n/a; Grant Numbers: 1) 2019-MU-AX-0017, 2) 2001ORSDC3; Federal Award Year: 2021; Control Deficiency Type: Material weakness in internal controls over compliance and financial reporting Instance of Noncompliance: Yes; Compliance Requirement: Allowable costs; Questioned Costs: 1) ALN 16.556: none over $25,000 2) ALN 93.591: $53,351; Repeat Finding: No;
Criteria: According to 2 CFR §200.405, costs of a federal award must be allowable and allocable. A cost is allocable to a particular federal award if the goods or services involved are chargeable to the federal award in accordance with relative benefits received. This standard is met if the cost was incurred specifically for the federal award; benefits both the federal award and other work of the non-federal entity and can be distributed in proportions that may be approximated using reasonable methods; and is necessary to the overall operation of the non-federal entity and is assignable in part to the federal award in accordance with cost principles in this section. An organization must use an equitable distribution base to allocate its indirect and administrative costs. The organization should have controls in place to ensure that indirect costs are charged uniformly to both federally funded activities and other activities of the organization, and the allocation methodology results in an equitable allocation of indirect and shared administrative costs.
Condition: During the audit, it was noted that costs appearing administrative in nature were charged as direct costs to two federal awards, including $39,814 of the accounting manager’s salary and $26,797 in audit fees relating to the fiscal year 2020 audit, a year in which no Single Audit was require or performed. In accordance with CFR §200.425, costs of auditing a non-federal entity that is exempted from having an audit conducted under the Single Audit Act because its expenditures under federal awards are less than $750,000 during the non-federal entity’s fiscal year are considered unallowable costs.
Cause: The organization did not have a proper understanding of the Uniform Guidance regulations governing the expenditure of federal funds.
Effect: Costs that appeared to be administrative in nature and benefitted all programs were charged to two federal grants as direct expenses: $53,351 to ALN 93.591 and $13,260 to ALN 16.556.
Audit Recommendation: We recommend the Coalition develop controls and procedures to correctly distinguish between direct and indirect costs, as well as, procedures to identify and exclude costs that the Uniform Guidance has indicated as unallowable costs.
Management’s Response: OCADSV added an Administrative Cost Center to its General Ledger effective 10/01/22, the beginning of FY23 and began costing administrative payroll cost to that cost center. Additionally, the organization retrained administrative staff on direct cost allowable activities vs. administrative activities relative to timekeeping and timesheet preparation and the necessity of daily work descriptions supporting the hourly allocation. The Payroll policy that requires supervisors to review and sign off on timesheets and hourly allocations to cost centers was also reviewed.
Audit costs for FY22 will be allocated in accordance with 2 CFR 200.405 requirements. Beginning with FY23 all accounting and other admin payroll related cost will be allocated to the administration cost center with the exception of time spent in activities related to a specific grant or other cost center.
FY22 grant expenditures were reviewed post year-end and a line-by-line review was conducted to bring the di-rect and indirect expense cumulative total into compliance with audit findings.
Any outstanding reports were adjusted to reflect the adjusted Life of Grant to current date reporting.
Executive, Financial and Grant Management staff will, during FY24, complete the Online Grants Financial Management Training available at onlinegfmt.training.ojp.gov to improve knowledge and compliance with 2 CFR 200 guidance and requirements. The said training will be incorporated into onboarding processes for any newly hired employee who have direct responsibilities related to grant management and/or reporting
Finding Number: 2021-005; Finding Type: Federal award finding; Federal Assistance Listing No.: 93.665; Pro-gram Name: COVID -19 Emergency Grants to Address Mental and Substance Use Disorders During COVID-19; Federal Agency: U.S. Department of Health and Human Services; Pass-Through Entity: Oregon Health Authority; Grant Number: 167045; Federal Award Year: 2021; Control Deficiency Type: Significant deficiency in internal controls over compliance; Instance of Noncompliance: Yes; Compliance Requirement: Subrecipient monitoring; Questioned Costs: None; Repeat Finding: No;
Criteria: In accordance with the requirements of 2 CFR §200.332, a pass-through entity must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all the required information at the time of the subaward so that federal award is used in accordance with federal statutes, regulations and the terms and conditions of the federal award.
Condition: The Coalition did not include all of the required information in the subawards granted to subre-cipients. Information missing from the subaward grant agreements includes the following: Subrecipient unique entity identifier; Federal award date; Total amount of federal funds obligated to subrecipient including the current award; Name of federal awarding agency, pass-through entity, and contact information for awarding official of the pass-through entity; Assistance listings number; the pass through entity must identify the dollar amount made available under each federal award and the Assistance Listings Number at the time of disburse-ment; Indirect cost rate for the federal award (including if the de minimis rate is charged) per § 200.414; All requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in ac-cordance with federal statutes, regulations and the terms and conditions of the federal award.
Cause: The coalition was unaware of the subaward requirements of CFR §200.332.
Effect: The Coalition did not comply with CFR §200.332.
Audit Recommendation: We recommend that management implement procedures to ensure that all subawards contain the information required by CFR §200.332.
Management’s Response: The Coalition will ensure that all future federal subawards will contain the infor-mation required by CFR §200.332. All contracts, sub-grantees, and MOUs, will include information required.
Finding Number: 2021-006; Finding Type: Federal award finding; Federal Assistance Listing No.: 1) 16.556, 2) 93.665; Program Name: 1) State Domestic Violence and Sexual Assault Coalitions, 2) COVID-19 Emergency Grants to Address Mental and Substance Use Disorders During COVID-19; Federal Agency: 1) U.S. Depart-ment of Justice, 2) U.S. Department of Health and Human Services; Pass-Through Entity: 1) ALN 16.556: n/a., 2) ALN 93.665: Oregon Health Authority; Grant Number: 1) 2019-MU-AX-0017, 2) 167045; Federal Award Year: 2021; Control Deficiency Type: Significant deficiency in internal controls over compliance; Instance of Noncompliance: Yes; Compliance Requirement: Reporting; Questioned Costs: None; Repeat Finding: No;
Criteria: In accordance with the requirements of CFR §200.512, the audit shall be completed and the data collection form and reporting package shall be submitted to the Federal Audit Clearinghouse within the earlier of 30 days after receipt of the auditor’s report, or nine months after the end of the audit period.
Condition: The Coalition did not electronically submit its September 30, 2021 Single Audit reporting package to the Federal Clearinghouse within the required time period.
Cause: The organization’s 2021 accounting records were not closed in a timely matter, and the audit was not completed prior to the data collection form due date.
Effect: The Coalition did not comply with CFR §200.512. The late submission results in non-compliance for all federal programs.
Audit Recommendation: We recommend that management implement procedures to ensure that all required reporting is submitted in a timely manner and in accordance with CFR §200.512 deadlines.
Management’s Response: During this time, the Coalition went through several temporary fiscal staff and one permanent hired staff that had made mistakes, with the effect of having to make adjustments in order to attempt to close accounting records. Controls have been put into place and permanent accounting manager is in place.
Finding Number: 2021-001; Finding Type: Federal award finding and financial statement finding; Federal Assistance Listing No.: 16.556; Program Name: State Domestic Violence and Sexual Assault Coalitions; Federal Agency: U.S. Department of Justice; Pass-Through Entity: n/a; Grant Number: 2019-MU-AX-0017; Federal Award Year: 2021; Control Deficiency Type: Material weakness in internal controls over compliance and financial reporting; Instance of Noncompliance: Yes; Compliance Requirement: Allowable costs; Questioned Costs: None over $25,000; Repeat Finding: No;
Criteria: According to 2 CFR §200.414, an organization that does not have a current federally-negotiated indirect cost rate may either negotiate a rate with the pass-through entity or elect to charge a de minimis rate of 10% of Modified Total Direct Cost (“MTDC”). An organization must use an equitable distribution base to allocate its indirect and administrative costs. An organization using total direct costs as a distribution base must modify the base to exclude capital expenditures and other distorting items, such as subcontracts or subawards for $25,000 or more, rental costs, tuition remission, scholarships and fellowships, and participant support costs, in accordance with 2 CFR §200.68. The organization should have controls in place to ensure that indirect costs are charged uniformly to both federally funded activities and other activities of the organization, and the allocation methodology results in an equitable allocation of indirect and shared administrative costs.
Condition: The organization did not have a federally-negotiated indirect cost rate nor a negotiated rate with pass-through entities, and therefore, should have charged a de minimis rate of 10% of MTDC. Instead, the organization charged indirect costs using salary as an allocation base.
Cause: The organization did not have a proper understanding of the Uniform Guidance regulations governing the expenditure of federal funds.
Effect: The Coalition had to go back through the entire fiscal year and reallocate costs using the de minimis rate of 10% of MTDC. This resulted in adjustments to costs charged to Federal awards and other funding sources, and the related revenues recognized for cost reimbursement agreements.
Audit Recommendation: We recommend the Coalition develop a cost allocation plan for recovering direct and indirect costs. The cost allocation plan should be consistently applied to ensure that costs charged to grants and contracts are reasonable, adequately supported and the allocation methodology provides for an equitable allocation of direct and indirect costs. Documentation of the expense allocations, including support for the underlying expenses being allocated, and the determination of the allocation percentages used should be reviewed by a supervisor and maintained by the Coalition.
Management’s Response: The Coalition added an Administrative Cost Center to its General Ledger effective 10/01/22, the beginning of FY23 and began costing administrative payroll cost to that cost center. Additionally, the organization retrained administrative staff on direct cost allowable activities vs. administrative activities relative to timekeeping and timesheet preparation and the necessity of daily work descriptions supporting the hourly allocation. The Payroll policy that requires supervisors to review and sign off on timesheets and hourly allocations to cost centers was also reviewed. The Coalition is developing a formal cost allocation plan for recovery of direct and indirect cost using the 10% de minimis of MTDC. The allocation will be applied on a monthly basis and be incorporated in the annual budgeting process.
Finding Number: 2021-002; Finding Type: Federal award finding and financial statement finding; Federal Assistance Listing No.: 1) 16.556 2) 93.591; Program Names: 1) State Domestic Violence and Sexual Assault Coalitions 2) Family Violence Prevention and Services/State Domestic Violence Coalition; Federal Agencies: 1) U.S. Department of Justice 2) U.S. Department of Health and Human Services; Pass-Through Entity: n/a; Grant Numbers: 1) 2019-MU-AX-0017, 2) 2001ORSDC3; Federal Award Year: 2021; Control Deficiency Type: Material weakness in internal controls over compliance and financial reporting Instance of Noncompliance: Yes; Compliance Requirement: Allowable costs; Questioned Costs: 1) ALN 16.556: none over $25,000 2) ALN 93.591: $53,351; Repeat Finding: No;
Criteria: According to 2 CFR §200.405, costs of a federal award must be allowable and allocable. A cost is allocable to a particular federal award if the goods or services involved are chargeable to the federal award in accordance with relative benefits received. This standard is met if the cost was incurred specifically for the federal award; benefits both the federal award and other work of the non-federal entity and can be distributed in proportions that may be approximated using reasonable methods; and is necessary to the overall operation of the non-federal entity and is assignable in part to the federal award in accordance with cost principles in this section. An organization must use an equitable distribution base to allocate its indirect and administrative costs. The organization should have controls in place to ensure that indirect costs are charged uniformly to both federally funded activities and other activities of the organization, and the allocation methodology results in an equitable allocation of indirect and shared administrative costs.
Condition: During the audit, it was noted that costs appearing administrative in nature were charged as direct costs to two federal awards, including $39,814 of the accounting manager’s salary and $26,797 in audit fees relating to the fiscal year 2020 audit, a year in which no Single Audit was require or performed. In accordance with CFR §200.425, costs of auditing a non-federal entity that is exempted from having an audit conducted under the Single Audit Act because its expenditures under federal awards are less than $750,000 during the non-federal entity’s fiscal year are considered unallowable costs.
Cause: The organization did not have a proper understanding of the Uniform Guidance regulations governing the expenditure of federal funds.
Effect: Costs that appeared to be administrative in nature and benefitted all programs were charged to two federal grants as direct expenses: $53,351 to ALN 93.591 and $13,260 to ALN 16.556.
Audit Recommendation: We recommend the Coalition develop controls and procedures to correctly distinguish between direct and indirect costs, as well as, procedures to identify and exclude costs that the Uniform Guidance has indicated as unallowable costs.
Management’s Response: OCADSV added an Administrative Cost Center to its General Ledger effective 10/01/22, the beginning of FY23 and began costing administrative payroll cost to that cost center. Additionally, the organization retrained administrative staff on direct cost allowable activities vs. administrative activities relative to timekeeping and timesheet preparation and the necessity of daily work descriptions supporting the hourly allocation. The Payroll policy that requires supervisors to review and sign off on timesheets and hourly allocations to cost centers was also reviewed.
Audit costs for FY22 will be allocated in accordance with 2 CFR 200.405 requirements. Beginning with FY23 all accounting and other admin payroll related cost will be allocated to the administration cost center with the exception of time spent in activities related to a specific grant or other cost center.
FY22 grant expenditures were reviewed post year-end and a line-by-line review was conducted to bring the di-rect and indirect expense cumulative total into compliance with audit findings.
Any outstanding reports were adjusted to reflect the adjusted Life of Grant to current date reporting.
Executive, Financial and Grant Management staff will, during FY24, complete the Online Grants Financial Management Training available at onlinegfmt.training.ojp.gov to improve knowledge and compliance with 2 CFR 200 guidance and requirements. The said training will be incorporated into onboarding processes for any newly hired employee who have direct responsibilities related to grant management and/or reporting
Finding Number: 2021-006; Finding Type: Federal award finding; Federal Assistance Listing No.: 1) 16.556, 2) 93.665; Program Name: 1) State Domestic Violence and Sexual Assault Coalitions, 2) COVID-19 Emergency Grants to Address Mental and Substance Use Disorders During COVID-19; Federal Agency: 1) U.S. Depart-ment of Justice, 2) U.S. Department of Health and Human Services; Pass-Through Entity: 1) ALN 16.556: n/a., 2) ALN 93.665: Oregon Health Authority; Grant Number: 1) 2019-MU-AX-0017, 2) 167045; Federal Award Year: 2021; Control Deficiency Type: Significant deficiency in internal controls over compliance; Instance of Noncompliance: Yes; Compliance Requirement: Reporting; Questioned Costs: None; Repeat Finding: No;
Criteria: In accordance with the requirements of CFR §200.512, the audit shall be completed and the data collection form and reporting package shall be submitted to the Federal Audit Clearinghouse within the earlier of 30 days after receipt of the auditor’s report, or nine months after the end of the audit period.
Condition: The Coalition did not electronically submit its September 30, 2021 Single Audit reporting package to the Federal Clearinghouse within the required time period.
Cause: The organization’s 2021 accounting records were not closed in a timely matter, and the audit was not completed prior to the data collection form due date.
Effect: The Coalition did not comply with CFR §200.512. The late submission results in non-compliance for all federal programs.
Audit Recommendation: We recommend that management implement procedures to ensure that all required reporting is submitted in a timely manner and in accordance with CFR §200.512 deadlines.
Management’s Response: During this time, the Coalition went through several temporary fiscal staff and one permanent hired staff that had made mistakes, with the effect of having to make adjustments in order to attempt to close accounting records. Controls have been put into place and permanent accounting manager is in place.
Finding Number: 2021-002; Finding Type: Federal award finding and financial statement finding; Federal Assistance Listing No.: 1) 16.556 2) 93.591; Program Names: 1) State Domestic Violence and Sexual Assault Coalitions 2) Family Violence Prevention and Services/State Domestic Violence Coalition; Federal Agencies: 1) U.S. Department of Justice 2) U.S. Department of Health and Human Services; Pass-Through Entity: n/a; Grant Numbers: 1) 2019-MU-AX-0017, 2) 2001ORSDC3; Federal Award Year: 2021; Control Deficiency Type: Material weakness in internal controls over compliance and financial reporting Instance of Noncompliance: Yes; Compliance Requirement: Allowable costs; Questioned Costs: 1) ALN 16.556: none over $25,000 2) ALN 93.591: $53,351; Repeat Finding: No;
Criteria: According to 2 CFR §200.405, costs of a federal award must be allowable and allocable. A cost is allocable to a particular federal award if the goods or services involved are chargeable to the federal award in accordance with relative benefits received. This standard is met if the cost was incurred specifically for the federal award; benefits both the federal award and other work of the non-federal entity and can be distributed in proportions that may be approximated using reasonable methods; and is necessary to the overall operation of the non-federal entity and is assignable in part to the federal award in accordance with cost principles in this section. An organization must use an equitable distribution base to allocate its indirect and administrative costs. The organization should have controls in place to ensure that indirect costs are charged uniformly to both federally funded activities and other activities of the organization, and the allocation methodology results in an equitable allocation of indirect and shared administrative costs.
Condition: During the audit, it was noted that costs appearing administrative in nature were charged as direct costs to two federal awards, including $39,814 of the accounting manager’s salary and $26,797 in audit fees relating to the fiscal year 2020 audit, a year in which no Single Audit was require or performed. In accordance with CFR §200.425, costs of auditing a non-federal entity that is exempted from having an audit conducted under the Single Audit Act because its expenditures under federal awards are less than $750,000 during the non-federal entity’s fiscal year are considered unallowable costs.
Cause: The organization did not have a proper understanding of the Uniform Guidance regulations governing the expenditure of federal funds.
Effect: Costs that appeared to be administrative in nature and benefitted all programs were charged to two federal grants as direct expenses: $53,351 to ALN 93.591 and $13,260 to ALN 16.556.
Audit Recommendation: We recommend the Coalition develop controls and procedures to correctly distinguish between direct and indirect costs, as well as, procedures to identify and exclude costs that the Uniform Guidance has indicated as unallowable costs.
Management’s Response: OCADSV added an Administrative Cost Center to its General Ledger effective 10/01/22, the beginning of FY23 and began costing administrative payroll cost to that cost center. Additionally, the organization retrained administrative staff on direct cost allowable activities vs. administrative activities relative to timekeeping and timesheet preparation and the necessity of daily work descriptions supporting the hourly allocation. The Payroll policy that requires supervisors to review and sign off on timesheets and hourly allocations to cost centers was also reviewed.
Audit costs for FY22 will be allocated in accordance with 2 CFR 200.405 requirements. Beginning with FY23 all accounting and other admin payroll related cost will be allocated to the administration cost center with the exception of time spent in activities related to a specific grant or other cost center.
FY22 grant expenditures were reviewed post year-end and a line-by-line review was conducted to bring the di-rect and indirect expense cumulative total into compliance with audit findings.
Any outstanding reports were adjusted to reflect the adjusted Life of Grant to current date reporting.
Executive, Financial and Grant Management staff will, during FY24, complete the Online Grants Financial Management Training available at onlinegfmt.training.ojp.gov to improve knowledge and compliance with 2 CFR 200 guidance and requirements. The said training will be incorporated into onboarding processes for any newly hired employee who have direct responsibilities related to grant management and/or reporting
Finding Number: 2021-005; Finding Type: Federal award finding; Federal Assistance Listing No.: 93.665; Pro-gram Name: COVID -19 Emergency Grants to Address Mental and Substance Use Disorders During COVID-19; Federal Agency: U.S. Department of Health and Human Services; Pass-Through Entity: Oregon Health Authority; Grant Number: 167045; Federal Award Year: 2021; Control Deficiency Type: Significant deficiency in internal controls over compliance; Instance of Noncompliance: Yes; Compliance Requirement: Subrecipient monitoring; Questioned Costs: None; Repeat Finding: No;
Criteria: In accordance with the requirements of 2 CFR §200.332, a pass-through entity must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all the required information at the time of the subaward so that federal award is used in accordance with federal statutes, regulations and the terms and conditions of the federal award.
Condition: The Coalition did not include all of the required information in the subawards granted to subre-cipients. Information missing from the subaward grant agreements includes the following: Subrecipient unique entity identifier; Federal award date; Total amount of federal funds obligated to subrecipient including the current award; Name of federal awarding agency, pass-through entity, and contact information for awarding official of the pass-through entity; Assistance listings number; the pass through entity must identify the dollar amount made available under each federal award and the Assistance Listings Number at the time of disburse-ment; Indirect cost rate for the federal award (including if the de minimis rate is charged) per § 200.414; All requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in ac-cordance with federal statutes, regulations and the terms and conditions of the federal award.
Cause: The coalition was unaware of the subaward requirements of CFR §200.332.
Effect: The Coalition did not comply with CFR §200.332.
Audit Recommendation: We recommend that management implement procedures to ensure that all subawards contain the information required by CFR §200.332.
Management’s Response: The Coalition will ensure that all future federal subawards will contain the infor-mation required by CFR §200.332. All contracts, sub-grantees, and MOUs, will include information required.
Finding Number: 2021-006; Finding Type: Federal award finding; Federal Assistance Listing No.: 1) 16.556, 2) 93.665; Program Name: 1) State Domestic Violence and Sexual Assault Coalitions, 2) COVID-19 Emergency Grants to Address Mental and Substance Use Disorders During COVID-19; Federal Agency: 1) U.S. Depart-ment of Justice, 2) U.S. Department of Health and Human Services; Pass-Through Entity: 1) ALN 16.556: n/a., 2) ALN 93.665: Oregon Health Authority; Grant Number: 1) 2019-MU-AX-0017, 2) 167045; Federal Award Year: 2021; Control Deficiency Type: Significant deficiency in internal controls over compliance; Instance of Noncompliance: Yes; Compliance Requirement: Reporting; Questioned Costs: None; Repeat Finding: No;
Criteria: In accordance with the requirements of CFR §200.512, the audit shall be completed and the data collection form and reporting package shall be submitted to the Federal Audit Clearinghouse within the earlier of 30 days after receipt of the auditor’s report, or nine months after the end of the audit period.
Condition: The Coalition did not electronically submit its September 30, 2021 Single Audit reporting package to the Federal Clearinghouse within the required time period.
Cause: The organization’s 2021 accounting records were not closed in a timely matter, and the audit was not completed prior to the data collection form due date.
Effect: The Coalition did not comply with CFR §200.512. The late submission results in non-compliance for all federal programs.
Audit Recommendation: We recommend that management implement procedures to ensure that all required reporting is submitted in a timely manner and in accordance with CFR §200.512 deadlines.
Management’s Response: During this time, the Coalition went through several temporary fiscal staff and one permanent hired staff that had made mistakes, with the effect of having to make adjustments in order to attempt to close accounting records. Controls have been put into place and permanent accounting manager is in place.
Finding Number: 2021-001; Finding Type: Federal award finding and financial statement finding; Federal Assistance Listing No.: 16.556; Program Name: State Domestic Violence and Sexual Assault Coalitions; Federal Agency: U.S. Department of Justice; Pass-Through Entity: n/a; Grant Number: 2019-MU-AX-0017; Federal Award Year: 2021; Control Deficiency Type: Material weakness in internal controls over compliance and financial reporting; Instance of Noncompliance: Yes; Compliance Requirement: Allowable costs; Questioned Costs: None over $25,000; Repeat Finding: No;
Criteria: According to 2 CFR §200.414, an organization that does not have a current federally-negotiated indirect cost rate may either negotiate a rate with the pass-through entity or elect to charge a de minimis rate of 10% of Modified Total Direct Cost (“MTDC”). An organization must use an equitable distribution base to allocate its indirect and administrative costs. An organization using total direct costs as a distribution base must modify the base to exclude capital expenditures and other distorting items, such as subcontracts or subawards for $25,000 or more, rental costs, tuition remission, scholarships and fellowships, and participant support costs, in accordance with 2 CFR §200.68. The organization should have controls in place to ensure that indirect costs are charged uniformly to both federally funded activities and other activities of the organization, and the allocation methodology results in an equitable allocation of indirect and shared administrative costs.
Condition: The organization did not have a federally-negotiated indirect cost rate nor a negotiated rate with pass-through entities, and therefore, should have charged a de minimis rate of 10% of MTDC. Instead, the organization charged indirect costs using salary as an allocation base.
Cause: The organization did not have a proper understanding of the Uniform Guidance regulations governing the expenditure of federal funds.
Effect: The Coalition had to go back through the entire fiscal year and reallocate costs using the de minimis rate of 10% of MTDC. This resulted in adjustments to costs charged to Federal awards and other funding sources, and the related revenues recognized for cost reimbursement agreements.
Audit Recommendation: We recommend the Coalition develop a cost allocation plan for recovering direct and indirect costs. The cost allocation plan should be consistently applied to ensure that costs charged to grants and contracts are reasonable, adequately supported and the allocation methodology provides for an equitable allocation of direct and indirect costs. Documentation of the expense allocations, including support for the underlying expenses being allocated, and the determination of the allocation percentages used should be reviewed by a supervisor and maintained by the Coalition.
Management’s Response: The Coalition added an Administrative Cost Center to its General Ledger effective 10/01/22, the beginning of FY23 and began costing administrative payroll cost to that cost center. Additionally, the organization retrained administrative staff on direct cost allowable activities vs. administrative activities relative to timekeeping and timesheet preparation and the necessity of daily work descriptions supporting the hourly allocation. The Payroll policy that requires supervisors to review and sign off on timesheets and hourly allocations to cost centers was also reviewed. The Coalition is developing a formal cost allocation plan for recovery of direct and indirect cost using the 10% de minimis of MTDC. The allocation will be applied on a monthly basis and be incorporated in the annual budgeting process.
Finding Number: 2021-002; Finding Type: Federal award finding and financial statement finding; Federal Assistance Listing No.: 1) 16.556 2) 93.591; Program Names: 1) State Domestic Violence and Sexual Assault Coalitions 2) Family Violence Prevention and Services/State Domestic Violence Coalition; Federal Agencies: 1) U.S. Department of Justice 2) U.S. Department of Health and Human Services; Pass-Through Entity: n/a; Grant Numbers: 1) 2019-MU-AX-0017, 2) 2001ORSDC3; Federal Award Year: 2021; Control Deficiency Type: Material weakness in internal controls over compliance and financial reporting Instance of Noncompliance: Yes; Compliance Requirement: Allowable costs; Questioned Costs: 1) ALN 16.556: none over $25,000 2) ALN 93.591: $53,351; Repeat Finding: No;
Criteria: According to 2 CFR §200.405, costs of a federal award must be allowable and allocable. A cost is allocable to a particular federal award if the goods or services involved are chargeable to the federal award in accordance with relative benefits received. This standard is met if the cost was incurred specifically for the federal award; benefits both the federal award and other work of the non-federal entity and can be distributed in proportions that may be approximated using reasonable methods; and is necessary to the overall operation of the non-federal entity and is assignable in part to the federal award in accordance with cost principles in this section. An organization must use an equitable distribution base to allocate its indirect and administrative costs. The organization should have controls in place to ensure that indirect costs are charged uniformly to both federally funded activities and other activities of the organization, and the allocation methodology results in an equitable allocation of indirect and shared administrative costs.
Condition: During the audit, it was noted that costs appearing administrative in nature were charged as direct costs to two federal awards, including $39,814 of the accounting manager’s salary and $26,797 in audit fees relating to the fiscal year 2020 audit, a year in which no Single Audit was require or performed. In accordance with CFR §200.425, costs of auditing a non-federal entity that is exempted from having an audit conducted under the Single Audit Act because its expenditures under federal awards are less than $750,000 during the non-federal entity’s fiscal year are considered unallowable costs.
Cause: The organization did not have a proper understanding of the Uniform Guidance regulations governing the expenditure of federal funds.
Effect: Costs that appeared to be administrative in nature and benefitted all programs were charged to two federal grants as direct expenses: $53,351 to ALN 93.591 and $13,260 to ALN 16.556.
Audit Recommendation: We recommend the Coalition develop controls and procedures to correctly distinguish between direct and indirect costs, as well as, procedures to identify and exclude costs that the Uniform Guidance has indicated as unallowable costs.
Management’s Response: OCADSV added an Administrative Cost Center to its General Ledger effective 10/01/22, the beginning of FY23 and began costing administrative payroll cost to that cost center. Additionally, the organization retrained administrative staff on direct cost allowable activities vs. administrative activities relative to timekeeping and timesheet preparation and the necessity of daily work descriptions supporting the hourly allocation. The Payroll policy that requires supervisors to review and sign off on timesheets and hourly allocations to cost centers was also reviewed.
Audit costs for FY22 will be allocated in accordance with 2 CFR 200.405 requirements. Beginning with FY23 all accounting and other admin payroll related cost will be allocated to the administration cost center with the exception of time spent in activities related to a specific grant or other cost center.
FY22 grant expenditures were reviewed post year-end and a line-by-line review was conducted to bring the di-rect and indirect expense cumulative total into compliance with audit findings.
Any outstanding reports were adjusted to reflect the adjusted Life of Grant to current date reporting.
Executive, Financial and Grant Management staff will, during FY24, complete the Online Grants Financial Management Training available at onlinegfmt.training.ojp.gov to improve knowledge and compliance with 2 CFR 200 guidance and requirements. The said training will be incorporated into onboarding processes for any newly hired employee who have direct responsibilities related to grant management and/or reporting
Finding Number: 2021-006; Finding Type: Federal award finding; Federal Assistance Listing No.: 1) 16.556, 2) 93.665; Program Name: 1) State Domestic Violence and Sexual Assault Coalitions, 2) COVID-19 Emergency Grants to Address Mental and Substance Use Disorders During COVID-19; Federal Agency: 1) U.S. Depart-ment of Justice, 2) U.S. Department of Health and Human Services; Pass-Through Entity: 1) ALN 16.556: n/a., 2) ALN 93.665: Oregon Health Authority; Grant Number: 1) 2019-MU-AX-0017, 2) 167045; Federal Award Year: 2021; Control Deficiency Type: Significant deficiency in internal controls over compliance; Instance of Noncompliance: Yes; Compliance Requirement: Reporting; Questioned Costs: None; Repeat Finding: No;
Criteria: In accordance with the requirements of CFR §200.512, the audit shall be completed and the data collection form and reporting package shall be submitted to the Federal Audit Clearinghouse within the earlier of 30 days after receipt of the auditor’s report, or nine months after the end of the audit period.
Condition: The Coalition did not electronically submit its September 30, 2021 Single Audit reporting package to the Federal Clearinghouse within the required time period.
Cause: The organization’s 2021 accounting records were not closed in a timely matter, and the audit was not completed prior to the data collection form due date.
Effect: The Coalition did not comply with CFR §200.512. The late submission results in non-compliance for all federal programs.
Audit Recommendation: We recommend that management implement procedures to ensure that all required reporting is submitted in a timely manner and in accordance with CFR §200.512 deadlines.
Management’s Response: During this time, the Coalition went through several temporary fiscal staff and one permanent hired staff that had made mistakes, with the effect of having to make adjustments in order to attempt to close accounting records. Controls have been put into place and permanent accounting manager is in place.