Finding 2022-001 Documentation of Approval - Allowable Costs – Significant Deficiency in
Internal Control over Compliance
Agency Small Business Administration
Assistance Listing
Numbers (ALN)
59.075 – Shuttered Venue Operators Grant Program
Criteria or Specific
Requirement
The cost principles in 2 CFR Part 200, Subpart E (Cost Principles) prescribe
the requirements for cost accounting. In order for costs to be allowable under
federal grants, they must be consistent with policies and procedures that
apply uniformly to both federally financed and other activities of the nonfederal
entity and be adequately documented.
Condition
Documentation of invoice/timesheet approval was not retained for some
items tested.
Cause During the COVID-19 pandemic, some of the records of the Association were
filed in two different locations. Once the offices were reopened, the process
was not sufficiently designed to ensure every approved invoice was filed
appropriately.
Effect or
Potential Effect
Incorrect amounts could be charged to the program.
Questioned Costs Not applicable.
Context BDO selected 50 samples of nonpayroll costs and 44 payroll costs charged to
the program. For 11 of the 50 nonpayroll samples, documentation of invoice
approval was not retained, for a total of $5,616. The total nonpayroll amount
tested was $197,609 of a total population of $1,419,455. For 5 out of the 44
payroll samples, documentation of timesheet approval was not retained, for
a total of $7,677. The total payroll amount tested was $93,680 of a total
population of $1,234,542. The selection method for both samples was nonstatistical and does not represent a statistically valid sample. BDO was
able to review documentation to determine that cost was allowable and
recorded properly.
Identification as a
Repeat Finding
Not applicable, not a repeat finding.
Recommendation The Association should ensure that original approval documentation is
retained in the future.
Views of
Responsible
Officials
Management agrees with the finding and plans to retain invoice approval going
forward.
Finding 2022-002 Significant Deficiency over Internal Control over Compliance,
Noncompliance - Reporting
Agency Small Business Administration
Assistance Listing
Numbers (ALN)
59.075 – Shuttered Venue Operators Grant Program
Criteria or Specific
Requirement
2 CFR 200.512, Report Submission, establishes that the audit shall be
completed and the data collection form and reporting package submitted to
the Federal Audit Clearinghouse (FAC) within the earlier of 30 days after
receipt of the auditor's report or 9 months after the end of the audit period,
unless a longer period is agreed to in advance by the cognizant or oversight
agency for audit, and any extensions granted by the Office of Management
and Budget.
Condition
The Association did not comply with the required submission date of the data
collection form and reporting package to the FAC for the fiscal year ended
June 30, 2022.
Cause The Association did not have controls in place to ensure the audit was
completed timely so that the reporting package could be submitted to the
FAC within the required timeframe.
Effect or
Potential Effect
The Association is not compliant with 2 CFR 200.512. The Association could
be exposed to a reduction or elimination of funds by Federal awarding
agencies as a result.
Questioned Costs
Not applicable. Context This is a condition identified per review of the Association 's compliance with
the specified requirements.
Identification as a
Repeat Finding
Not applicable, not a repeat finding.
Recommendation We recommend that the Association implement internal control procedures
to ensure timely submission to the FAC in the future.
Views of
Responsible
Officials
Management agrees with the finding and plans to develop procedures to
ensure timely filing for any future federal funding received.
Finding 2022-001 Documentation of Approval - Allowable Costs – Significant Deficiency in
Internal Control over Compliance
Agency Small Business Administration
Assistance Listing
Numbers (ALN)
59.075 – Shuttered Venue Operators Grant Program
Criteria or Specific
Requirement
The cost principles in 2 CFR Part 200, Subpart E (Cost Principles) prescribe
the requirements for cost accounting. In order for costs to be allowable under
federal grants, they must be consistent with policies and procedures that
apply uniformly to both federally financed and other activities of the nonfederal
entity and be adequately documented.
Condition
Documentation of invoice/timesheet approval was not retained for some
items tested.
Cause During the COVID-19 pandemic, some of the records of the Association were
filed in two different locations. Once the offices were reopened, the process
was not sufficiently designed to ensure every approved invoice was filed
appropriately.
Effect or
Potential Effect
Incorrect amounts could be charged to the program.
Questioned Costs Not applicable.
Context BDO selected 50 samples of nonpayroll costs and 44 payroll costs charged to
the program. For 11 of the 50 nonpayroll samples, documentation of invoice
approval was not retained, for a total of $5,616. The total nonpayroll amount
tested was $197,609 of a total population of $1,419,455. For 5 out of the 44
payroll samples, documentation of timesheet approval was not retained, for
a total of $7,677. The total payroll amount tested was $93,680 of a total
population of $1,234,542. The selection method for both samples was nonstatistical and does not represent a statistically valid sample. BDO was
able to review documentation to determine that cost was allowable and
recorded properly.
Identification as a
Repeat Finding
Not applicable, not a repeat finding.
Recommendation The Association should ensure that original approval documentation is
retained in the future.
Views of
Responsible
Officials
Management agrees with the finding and plans to retain invoice approval going
forward.
Finding 2022-002 Significant Deficiency over Internal Control over Compliance,
Noncompliance - Reporting
Agency Small Business Administration
Assistance Listing
Numbers (ALN)
59.075 – Shuttered Venue Operators Grant Program
Criteria or Specific
Requirement
2 CFR 200.512, Report Submission, establishes that the audit shall be
completed and the data collection form and reporting package submitted to
the Federal Audit Clearinghouse (FAC) within the earlier of 30 days after
receipt of the auditor's report or 9 months after the end of the audit period,
unless a longer period is agreed to in advance by the cognizant or oversight
agency for audit, and any extensions granted by the Office of Management
and Budget.
Condition
The Association did not comply with the required submission date of the data
collection form and reporting package to the FAC for the fiscal year ended
June 30, 2022.
Cause The Association did not have controls in place to ensure the audit was
completed timely so that the reporting package could be submitted to the
FAC within the required timeframe.
Effect or
Potential Effect
The Association is not compliant with 2 CFR 200.512. The Association could
be exposed to a reduction or elimination of funds by Federal awarding
agencies as a result.
Questioned Costs
Not applicable. Context This is a condition identified per review of the Association 's compliance with
the specified requirements.
Identification as a
Repeat Finding
Not applicable, not a repeat finding.
Recommendation We recommend that the Association implement internal control procedures
to ensure timely submission to the FAC in the future.
Views of
Responsible
Officials
Management agrees with the finding and plans to develop procedures to
ensure timely filing for any future federal funding received.