Condition: During our audit, we identified the Agency had reported budgeted expenditures instead of actual expenditures for payroll and fringe benefit costs. This led to discrepancies between the reported amounts of federal expenditures and the actual expenditures incurred. Criteria: Under 2 CFR Part 200, entities are required to report actual expenditures incurred for federal awards. Budget estimates may be used for interim accounting purposes provided that the entity’s system of internal control includes processes to perform periodic after-the-fact reviews of charges to federal awards based on budget estimates, and a reconciliation to the actual amount incurred. Cause: The Agency’s internal control procedures do not include adequate measures to ensure that actual expenditures are used for reporting expenditures of federal awards. As a result, certain federal awards were charged based on budget, rather than actual expenditures incurred. Effect: Reporting budgeted expenditures instead of actual expenditures impairs the accuracy and reliability of financial reporting and could result in federal awards being charged improper amounts. Recommendation: We recommend the Agency implement procedures to ensure that actual expenditures are used for reporting of federal awards. This includes regular reconciliation of budgeted amounts to actual expenditures, and adjustment of future federal award draws when necessary. Management Response: Management agrees with this finding and has begun implementing corrective actions. These actions include revising internal control procedures to ensure actual expenditures are reconciled to budgeted amounts previously reported, and making adjustments when necessary.
Condition: During our audit, we noted the Agency did not comply with the cash management requirements for federal awards. Specifically, the Agency drew down federal funds in advance of immediate cash needs, resulting in excess cash balances being held for extended periods. Criteria: Under 2 CFR Part 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement of those funds for program purposes. Funds should be drawn down only as needed to meet immediate cash requirements. Cause: The Agency made periodic draws of federal awards without ensuring such draws were for immediate cash needs. Effect: Holding excess federal funds for extended periods can result in non-compliance with federal regulations, and could potentially increase the risk of mismanagement or misuse of funds. Recommendation: We recommend the Agency revise federal award cash draw procedures to ensure compliance with cash management requirements. Such draws should be made solely for immediate cash needs. Management Response: Management agrees with this finding and has begun implementing corrective actions. Such actions include implementing a process whereby federal draws are based on upcoming cash needs rather than periodic draws.
Condition: During our audit, we noted the Agency incurred expenditures and charged a federal award outside the approved period of performance for the grant. Criteria: Under 2 CFR Part 200.309, non-federal entities may charge to the federal award only allowable costs incurred during the period of performance Costs incurred outside this period are not allowable unless prior written approval is obtained from the awarding agency. Cause: The Agency accrued an expenditure in its accounting system and did not verify that the expenditure was for a service date within the approved period of performance. Effect: The federal award was overbilled by $1,904. Recommendation:We recommend the Agency more carefully monitor expenditures incurred near grant end dates to ensure compliance with period of performance compliance requirements. Management Response: Management agrees with this finding and will more carefully monitor grant end dates to comply with period of performance compliance requirements.
Condition: During our audit, we noted the Agency did not timely file the SF-425 report. The report was due by December 29, 2024, but not submitted until February 14, 2025. Criteria: The SF-425 report was initiated prior to the due date of the report, but was not certified until February 14, 2025. As a result, the report was not considered to be submitted until it had been certified. Effect: The SF-425 report was not submitted in a timely manner. Recommendation: We recommend the Agency be more diligent in ensuring required federal reports are submitted timely to ensure compliance with reporting requirements. Management Response: Management agrees with this finding and will more carefully monitor grant reporting requirements and due dates to comply with reporting compliance requirements.
Condition: During our audit, we identified the Agency had reported budgeted expenditures instead of actual expenditures for payroll and fringe benefit costs. This led to discrepancies between the reported amounts of federal expenditures and the actual expenditures incurred. Criteria: Under 2 CFR Part 200, entities are required to report actual expenditures incurred for federal awards. Budget estimates may be used for interim accounting purposes provided that the entity’s system of internal control includes processes to perform periodic after-the-fact reviews of charges to federal awards based on budget estimates, and a reconciliation to the actual amount incurred. Cause: The Agency’s internal control procedures do not include adequate measures to ensure that actual expenditures are used for reporting expenditures of federal awards. As a result, certain federal awards were charged based on budget, rather than actual expenditures incurred. Effect: Reporting budgeted expenditures instead of actual expenditures impairs the accuracy and reliability of financial reporting and could result in federal awards being charged improper amounts. Recommendation: We recommend the Agency implement procedures to ensure that actual expenditures are used for reporting of federal awards. This includes regular reconciliation of budgeted amounts to actual expenditures, and adjustment of future federal award draws when necessary. Management Response: Management agrees with this finding and has begun implementing corrective actions. These actions include revising internal control procedures to ensure actual expenditures are reconciled to budgeted amounts previously reported, and making adjustments when necessary.
Condition: During our audit, we noted the Agency did not comply with the cash management requirements for federal awards. Specifically, the Agency drew down federal funds in advance of immediate cash needs, resulting in excess cash balances being held for extended periods. Criteria: Under 2 CFR Part 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement of those funds for program purposes. Funds should be drawn down only as needed to meet immediate cash requirements. Cause: The Agency made periodic draws of federal awards without ensuring such draws were for immediate cash needs. Effect: Holding excess federal funds for extended periods can result in non-compliance with federal regulations, and could potentially increase the risk of mismanagement or misuse of funds. Recommendation: We recommend the Agency revise federal award cash draw procedures to ensure compliance with cash management requirements. Such draws should be made solely for immediate cash needs. Management Response: Management agrees with this finding and has begun implementing corrective actions. Such actions include implementing a process whereby federal draws are based on upcoming cash needs rather than periodic draws.
Condition: During our audit, we noted the Agency incurred expenditures and charged a federal award outside the approved period of performance for the grant. Criteria: Under 2 CFR Part 200.309, non-federal entities may charge to the federal award only allowable costs incurred during the period of performance Costs incurred outside this period are not allowable unless prior written approval is obtained from the awarding agency. Cause: The Agency accrued an expenditure in its accounting system and did not verify that the expenditure was for a service date within the approved period of performance. Effect: The federal award was overbilled by $1,904. Recommendation:We recommend the Agency more carefully monitor expenditures incurred near grant end dates to ensure compliance with period of performance compliance requirements. Management Response: Management agrees with this finding and will more carefully monitor grant end dates to comply with period of performance compliance requirements.
Condition: During our audit, we noted the Agency did not timely file the SF-425 report. The report was due by December 29, 2024, but not submitted until February 14, 2025. Criteria: The SF-425 report was initiated prior to the due date of the report, but was not certified until February 14, 2025. As a result, the report was not considered to be submitted until it had been certified. Effect: The SF-425 report was not submitted in a timely manner. Recommendation: We recommend the Agency be more diligent in ensuring required federal reports are submitted timely to ensure compliance with reporting requirements. Management Response: Management agrees with this finding and will more carefully monitor grant reporting requirements and due dates to comply with reporting compliance requirements.