2024-002 Internal Controls over Compliance and Compliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles Requirements (Significant Deficiency)
Information on the Federal Program:
U.S. Agency for International Development
Assistance Listing Number: 98.001
Assistance Listing Name: USAID Foreign Assistance for Programs Overseas
Grant Award Number(s):
Direct Award Number Award Period
720BHA22GR00225 May 13, 2022 through May 10, 2024
720BHA22GR00127 April 15, 2022 through April 14, 2024
Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework”, issued by the COSO.
In accordance with 2 CFR §200. 308, 200.309, and 200.403(h), a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. A period of performance may contain one or more budget periods.
Condition: During our testing of the activities allowed or unallowed and allowable costs/cost principles compliance requirements, we identified one disbursement sample out of a total of twenty-five disbursement samples tested wherein management charged the federal program on June 2024 when the transaction happened on December 2022. In particular, the inventory distribution in the amount of $4,258.53 that took place in December 2022 should have been recorded as an expense in fiscal year 2023 rather than in fiscal year 2024. In addition, during our testing of period of performance compliance requirements, we also noted another inventory distribution in the amount of $235.89 that took place on August 2023 but it was only recorded on June 2024. The expenditures are allowable and within the period of performance, however, the controls over timely reconciliation and recording the inventory distributions did not occur in the appropriate reporting period.
Questioned Costs: There are no known or likely questioned costs.
Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method.
Cause: Delays in performing the reconciliation and timely recording of inventory distributions in certain CRS country offices were caused by personnel’s unfamiliarity with the use of the new Supply Chain Management system, a system used in inventory management.
Effect: Failure to timely reconcile and record transactions in the correct accounting period results in incorrect SEFA reporting to the U.S. government.
Repeat Finding: No.
Recommendation: We recommend that management ensure timely reconciliation of inventory distributions in order to record the transactions in the correct accounting period. In addition, management should conduct appropriate training to CRS country office personnel with the proper use of the Supply Chain Management system to ensure timely reconciliation and recording of inventory distributions.
Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance the inventory reconciliation processes.
2024-002 Internal Controls over Compliance and Compliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles Requirements (Significant Deficiency)
Information on the Federal Program:
U.S. Agency for International Development
Assistance Listing Number: 98.001
Assistance Listing Name: USAID Foreign Assistance for Programs Overseas
Grant Award Number(s):
Direct Award Number Award Period
720BHA22GR00225 May 13, 2022 through May 10, 2024
720BHA22GR00127 April 15, 2022 through April 14, 2024
Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework”, issued by the COSO.
In accordance with 2 CFR §200. 308, 200.309, and 200.403(h), a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. A period of performance may contain one or more budget periods.
Condition: During our testing of the activities allowed or unallowed and allowable costs/cost principles compliance requirements, we identified one disbursement sample out of a total of twenty-five disbursement samples tested wherein management charged the federal program on June 2024 when the transaction happened on December 2022. In particular, the inventory distribution in the amount of $4,258.53 that took place in December 2022 should have been recorded as an expense in fiscal year 2023 rather than in fiscal year 2024. In addition, during our testing of period of performance compliance requirements, we also noted another inventory distribution in the amount of $235.89 that took place on August 2023 but it was only recorded on June 2024. The expenditures are allowable and within the period of performance, however, the controls over timely reconciliation and recording the inventory distributions did not occur in the appropriate reporting period.
Questioned Costs: There are no known or likely questioned costs.
Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method.
Cause: Delays in performing the reconciliation and timely recording of inventory distributions in certain CRS country offices were caused by personnel’s unfamiliarity with the use of the new Supply Chain Management system, a system used in inventory management.
Effect: Failure to timely reconcile and record transactions in the correct accounting period results in incorrect SEFA reporting to the U.S. government.
Repeat Finding: No.
Recommendation: We recommend that management ensure timely reconciliation of inventory distributions in order to record the transactions in the correct accounting period. In addition, management should conduct appropriate training to CRS country office personnel with the proper use of the Supply Chain Management system to ensure timely reconciliation and recording of inventory distributions.
Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance the inventory reconciliation processes.
2024-003 Internal Controls over Compliance and Compliance with Period of Performance Requirement (Significant Deficiency)
Information on the Federal Program:
U.S. Department of Agriculture
Assistance Listing Number: 10.612
Assistance Listing Name: USDA Local and Regional Food Aid Procurement Program
Grant Award Number:
Direct Award Number Award Period
LRP-686-2019/015-00-A October 1, 2019 through September 30, 2024
Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework”, issued by the COSO.
In accordance with 2 CFR §200. 308, 200.309, and 200.403(h), a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. A period of performance may contain one or more budget periods.
Condition: During our testing of the period of performance compliance requirements, we identified two disbursement samples for a total of $1,574.09 out of a total of twenty-five disbursement samples tested wherein management was unable to provide evidence that the expenditures charged to the program were valid and incurred within the appropriate period of performance. Management also subsequently concluded that these transactions should have been captured as inventory and not charged as expenditure to the federal program.
Questioned Costs: $1,574.09 from our samples.
Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method. The total amount of the twenty-five samples selected for testing was $62,914.
Cause: CRS country office personnel did not adhere to CRS’s documented policies and procedures for ensuring only valid and allowable expenses are charged to the federal program within the appropriate period of performance.
Effect: Without adequate internal controls in place to ensure costs are properly reviewed for allowability and appropriate period of performance, CRS could be noncompliant with the allowability and period of performance requirements and could request funds for costs that are unallowed.
Repeat Finding: No.
Recommendation: We recommend that management follow its own policies, procedures and controls to ensure that the inventory expenses charged to the federal program are allowable within the period of performance.
Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance processes around inventory expense allowability.
2024-004 Internal Controls over Compliance and Compliance with Equipment and Real Property Management (Significant Deficiency)
Information on the Federal Program:
U.S. Department of Agriculture
Assistance Listing Number: 10.606
Assistance Listing Name: Food for Progress
Grant Award Number:
Direct Award Number Award Period
FCC-521-2016/012-00 September 29, 2016 through September 30, 2025
Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework”, issued by the COSO.
Also, a physical inventory of property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)).
Condition: During our testing of the equipment and real property management compliance requirements, we noted that there is no formally documented physical count of property acquired using federal funds in 2024 specific to Haiti.
Questioned Costs: There are no known or likely questioned costs.
Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method.
Cause: CRS country office personnel did not adhere to CRS’s documented policies and procedures for ensuring proper compliance with monitoring of property acquired using federal funds.
Effect: Failure to conduct physical inventory of property could lead to misappropriation of assets and noncompliance with Federal regulations resulting in return of Federal awards received.
Repeat Finding: No.
Recommendation: We recommend that management implement policies, procedures and controls that will ensure the physical counts of property are conducted, that evidence of a count is formally documented and an authorized individual formally approves the result of the count, and the related reconciliation of property records, in order to adhere to Federal regulations related to equipment management and its related maintenance.
Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance processes surrounding property reconciliation.
2024-002 Internal Controls over Compliance and Compliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles Requirements (Significant Deficiency)
Information on the Federal Program:
U.S. Agency for International Development
Assistance Listing Number: 98.001
Assistance Listing Name: USAID Foreign Assistance for Programs Overseas
Grant Award Number(s):
Direct Award Number Award Period
720BHA22GR00225 May 13, 2022 through May 10, 2024
720BHA22GR00127 April 15, 2022 through April 14, 2024
Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework”, issued by the COSO.
In accordance with 2 CFR §200. 308, 200.309, and 200.403(h), a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. A period of performance may contain one or more budget periods.
Condition: During our testing of the activities allowed or unallowed and allowable costs/cost principles compliance requirements, we identified one disbursement sample out of a total of twenty-five disbursement samples tested wherein management charged the federal program on June 2024 when the transaction happened on December 2022. In particular, the inventory distribution in the amount of $4,258.53 that took place in December 2022 should have been recorded as an expense in fiscal year 2023 rather than in fiscal year 2024. In addition, during our testing of period of performance compliance requirements, we also noted another inventory distribution in the amount of $235.89 that took place on August 2023 but it was only recorded on June 2024. The expenditures are allowable and within the period of performance, however, the controls over timely reconciliation and recording the inventory distributions did not occur in the appropriate reporting period.
Questioned Costs: There are no known or likely questioned costs.
Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method.
Cause: Delays in performing the reconciliation and timely recording of inventory distributions in certain CRS country offices were caused by personnel’s unfamiliarity with the use of the new Supply Chain Management system, a system used in inventory management.
Effect: Failure to timely reconcile and record transactions in the correct accounting period results in incorrect SEFA reporting to the U.S. government.
Repeat Finding: No.
Recommendation: We recommend that management ensure timely reconciliation of inventory distributions in order to record the transactions in the correct accounting period. In addition, management should conduct appropriate training to CRS country office personnel with the proper use of the Supply Chain Management system to ensure timely reconciliation and recording of inventory distributions.
Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance the inventory reconciliation processes.
2024-002 Internal Controls over Compliance and Compliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles Requirements (Significant Deficiency)
Information on the Federal Program:
U.S. Agency for International Development
Assistance Listing Number: 98.001
Assistance Listing Name: USAID Foreign Assistance for Programs Overseas
Grant Award Number(s):
Direct Award Number Award Period
720BHA22GR00225 May 13, 2022 through May 10, 2024
720BHA22GR00127 April 15, 2022 through April 14, 2024
Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework”, issued by the COSO.
In accordance with 2 CFR §200. 308, 200.309, and 200.403(h), a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. A period of performance may contain one or more budget periods.
Condition: During our testing of the activities allowed or unallowed and allowable costs/cost principles compliance requirements, we identified one disbursement sample out of a total of twenty-five disbursement samples tested wherein management charged the federal program on June 2024 when the transaction happened on December 2022. In particular, the inventory distribution in the amount of $4,258.53 that took place in December 2022 should have been recorded as an expense in fiscal year 2023 rather than in fiscal year 2024. In addition, during our testing of period of performance compliance requirements, we also noted another inventory distribution in the amount of $235.89 that took place on August 2023 but it was only recorded on June 2024. The expenditures are allowable and within the period of performance, however, the controls over timely reconciliation and recording the inventory distributions did not occur in the appropriate reporting period.
Questioned Costs: There are no known or likely questioned costs.
Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method.
Cause: Delays in performing the reconciliation and timely recording of inventory distributions in certain CRS country offices were caused by personnel’s unfamiliarity with the use of the new Supply Chain Management system, a system used in inventory management.
Effect: Failure to timely reconcile and record transactions in the correct accounting period results in incorrect SEFA reporting to the U.S. government.
Repeat Finding: No.
Recommendation: We recommend that management ensure timely reconciliation of inventory distributions in order to record the transactions in the correct accounting period. In addition, management should conduct appropriate training to CRS country office personnel with the proper use of the Supply Chain Management system to ensure timely reconciliation and recording of inventory distributions.
Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance the inventory reconciliation processes.
2024-003 Internal Controls over Compliance and Compliance with Period of Performance Requirement (Significant Deficiency)
Information on the Federal Program:
U.S. Department of Agriculture
Assistance Listing Number: 10.612
Assistance Listing Name: USDA Local and Regional Food Aid Procurement Program
Grant Award Number:
Direct Award Number Award Period
LRP-686-2019/015-00-A October 1, 2019 through September 30, 2024
Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework”, issued by the COSO.
In accordance with 2 CFR §200. 308, 200.309, and 200.403(h), a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. A period of performance may contain one or more budget periods.
Condition: During our testing of the period of performance compliance requirements, we identified two disbursement samples for a total of $1,574.09 out of a total of twenty-five disbursement samples tested wherein management was unable to provide evidence that the expenditures charged to the program were valid and incurred within the appropriate period of performance. Management also subsequently concluded that these transactions should have been captured as inventory and not charged as expenditure to the federal program.
Questioned Costs: $1,574.09 from our samples.
Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method. The total amount of the twenty-five samples selected for testing was $62,914.
Cause: CRS country office personnel did not adhere to CRS’s documented policies and procedures for ensuring only valid and allowable expenses are charged to the federal program within the appropriate period of performance.
Effect: Without adequate internal controls in place to ensure costs are properly reviewed for allowability and appropriate period of performance, CRS could be noncompliant with the allowability and period of performance requirements and could request funds for costs that are unallowed.
Repeat Finding: No.
Recommendation: We recommend that management follow its own policies, procedures and controls to ensure that the inventory expenses charged to the federal program are allowable within the period of performance.
Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance processes around inventory expense allowability.
2024-004 Internal Controls over Compliance and Compliance with Equipment and Real Property Management (Significant Deficiency)
Information on the Federal Program:
U.S. Department of Agriculture
Assistance Listing Number: 10.606
Assistance Listing Name: Food for Progress
Grant Award Number:
Direct Award Number Award Period
FCC-521-2016/012-00 September 29, 2016 through September 30, 2025
Criteria or Specific Requirement: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ‐ Post Federal Award Requirements, Section 200.303 ‐ Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework”, issued by the COSO.
Also, a physical inventory of property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)).
Condition: During our testing of the equipment and real property management compliance requirements, we noted that there is no formally documented physical count of property acquired using federal funds in 2024 specific to Haiti.
Questioned Costs: There are no known or likely questioned costs.
Context: This is a condition based on testing of CRS’s compliance with specified requirements. The prevalence of the finding is detailed in the condition section above. The samples were selected using a non-statistical method.
Cause: CRS country office personnel did not adhere to CRS’s documented policies and procedures for ensuring proper compliance with monitoring of property acquired using federal funds.
Effect: Failure to conduct physical inventory of property could lead to misappropriation of assets and noncompliance with Federal regulations resulting in return of Federal awards received.
Repeat Finding: No.
Recommendation: We recommend that management implement policies, procedures and controls that will ensure the physical counts of property are conducted, that evidence of a count is formally documented and an authorized individual formally approves the result of the count, and the related reconciliation of property records, in order to adhere to Federal regulations related to equipment management and its related maintenance.
Views of Responsible Officials: CRS management agrees with the finding and recommendations and will enhance processes surrounding property reconciliation.