Audit 25321

2022-001 Federal Agency: U.S. Small Business Administration Federal Program Title: Shuttered Venue Operators Grant Assistance Listing Number: 59.075 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding: Other Matter and Significant Deficiency over Internal Control over Compliance Criteria: Funds applied to the SVOG award must follow 2 CFR 200 Subpart E, Cost Principles. Within 200.406 of the cost principles, it states: Applicable credits refer to those receipts or reduction-of-expenditure-type transactions that offset or reduce expense items allocable to the federal award as direct or indirect (F&A) costs. To the extent that such credits accruing to or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award either as a cost reduction or cash refund, as appropriate. Condition: Carolina Ballet received reimbursement for the full amount of an expenditure for which they received a discount. Questioned costs: None. Context: During our testing of 60 samples, CLA noted 1 item listed on Carolina Ballet?s supporting detail of expenditures internally allocated to the SVOG grant funding which did not reflect as net of an early payment discount of approximately $4,400. This resulted in the supporting detail of expenditures documentation provided to CLA being $4,400 less than the reported total for the line item. Carolina Ballet did have and submit once this was noted, additional allowable expenditures with supporting documentation available that could have been included on the supporting detail of expenditures to cover the amount of credit/discount that caused the difference. Cause: Carolina Ballet did not have a process in place to ensure any credit amounts were not applied to the grant. Effect: Carolina Ballet could apply an ineligible expenditure to the grant. Repeat Finding: No Recommendation: We recommend management implement a process to ensure expenditures applied to the grant are net of applicable credits (discounts). Views of responsible officials: Carolina Ballet management?s opinion is there were no deficiencies in internal control over compliance around oversight of allowable expenditures allocated to the SVOG grant funding. The finding is not a result of intentional inclusion of nonallowable expenditures, or a lack of internal control or oversight of expenditures. Carolina Ballet acknowledges the line-item transaction included in the supporting detail provided to the auditors resulted in the finding stating supporting detail submitted by Carolina Ballet staff did not reflect a discount which was applied at the time of payment for the allowable expenditure. This occurred due to Carolina Ballet?s internal process of recording an anticipated early payment discount/credit for this specific vendor in QuickBooks as a separate transaction, which subsequently did not reflect the net amount of the payment in the system report exported and used for data extraction. Due to the early payment discount credit not being applied in the SVOG line-item calculations, Carolina Ballet?s supporting detail did not include an additional allowable expenditure of the same type to cover the discount credit inadvertently omitted. Carolina Ballet submitted documentation to the auditors supporting the fact additional allocable expenditures (reflecting net amount) were available for inclusion in the detail over the amount of the discount on the transaction. Regarding the Cause in the finding noted above: There was an internal control process in place executed by the previous accounting management during the period covered by the grant to monitor expenses and make purchases in accordance with the planned use for the grant funding and to ensure they were allowable. There is internal evidence of this including the fact that the Director of Accounting during the grant period provided oversight for outgoing payments and applicable credits at Carolina Ballet. This same general process continues to exist currently. The CEO of Carolina Ballet approved and signed off on all payments for the listed expenditures, including review of credits applied during the grant period. There was a calculation error of a line-item amount referred to in the finding due to exclusion of an early payment discount credit for this single expenditure in the detail, such that Carolina Ballet didn?t include an additional eligible and allowable expenditure under the grant funding. This was an error in the detail listing, not a lack of internal control processes over the grant funded expenditures and credits. There were other credits applied to this payment, that were appropriate for consideration as payment that should not have and were not applied to the expenditure amount.

2022-001 Federal Agency: U.S. Small Business Administration Federal Program Title: Shuttered Venue Operators Grant Assistance Listing Number: 59.075 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding: Other Matter and Significant Deficiency over Internal Control over Compliance Criteria: Funds applied to the SVOG award must follow 2 CFR 200 Subpart E, Cost Principles. Within 200.406 of the cost principles, it states: Applicable credits refer to those receipts or reduction-of-expenditure-type transactions that offset or reduce expense items allocable to the federal award as direct or indirect (F&A) costs. To the extent that such credits accruing to or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award either as a cost reduction or cash refund, as appropriate. Condition: Carolina Ballet received reimbursement for the full amount of an expenditure for which they received a discount. Questioned costs: None. Context: During our testing of 60 samples, CLA noted 1 item listed on Carolina Ballet?s supporting detail of expenditures internally allocated to the SVOG grant funding which did not reflect as net of an early payment discount of approximately $4,400. This resulted in the supporting detail of expenditures documentation provided to CLA being $4,400 less than the reported total for the line item. Carolina Ballet did have and submit once this was noted, additional allowable expenditures with supporting documentation available that could have been included on the supporting detail of expenditures to cover the amount of credit/discount that caused the difference. Cause: Carolina Ballet did not have a process in place to ensure any credit amounts were not applied to the grant. Effect: Carolina Ballet could apply an ineligible expenditure to the grant. Repeat Finding: No Recommendation: We recommend management implement a process to ensure expenditures applied to the grant are net of applicable credits (discounts). Views of responsible officials: Carolina Ballet management?s opinion is there were no deficiencies in internal control over compliance around oversight of allowable expenditures allocated to the SVOG grant funding. The finding is not a result of intentional inclusion of nonallowable expenditures, or a lack of internal control or oversight of expenditures. Carolina Ballet acknowledges the line-item transaction included in the supporting detail provided to the auditors resulted in the finding stating supporting detail submitted by Carolina Ballet staff did not reflect a discount which was applied at the time of payment for the allowable expenditure. This occurred due to Carolina Ballet?s internal process of recording an anticipated early payment discount/credit for this specific vendor in QuickBooks as a separate transaction, which subsequently did not reflect the net amount of the payment in the system report exported and used for data extraction. Due to the early payment discount credit not being applied in the SVOG line-item calculations, Carolina Ballet?s supporting detail did not include an additional allowable expenditure of the same type to cover the discount credit inadvertently omitted. Carolina Ballet submitted documentation to the auditors supporting the fact additional allocable expenditures (reflecting net amount) were available for inclusion in the detail over the amount of the discount on the transaction. Regarding the Cause in the finding noted above: There was an internal control process in place executed by the previous accounting management during the period covered by the grant to monitor expenses and make purchases in accordance with the planned use for the grant funding and to ensure they were allowable. There is internal evidence of this including the fact that the Director of Accounting during the grant period provided oversight for outgoing payments and applicable credits at Carolina Ballet. This same general process continues to exist currently. The CEO of Carolina Ballet approved and signed off on all payments for the listed expenditures, including review of credits applied during the grant period. There was a calculation error of a line-item amount referred to in the finding due to exclusion of an early payment discount credit for this single expenditure in the detail, such that Carolina Ballet didn?t include an additional eligible and allowable expenditure under the grant funding. This was an error in the detail listing, not a lack of internal control processes over the grant funded expenditures and credits. There were other credits applied to this payment, that were appropriate for consideration as payment that should not have and were not applied to the expenditure amount.