Audit 37144

Federal Agency: U.S. Department of Commerce Compliance Requirement: Period of Performance Federal Program: 11.805 - MBDA Business Center-Coronavirus Recovery/Relief Grant Award: MB21OBD8050183 Condition/Context: During FY2022, CRMSDC purchased a software subscription used to help MBEs locate state and local contract opportunities. The subscription period was from June 28, 2022 through June 27, 2023; however, the federal award ended on June 30, 2022. Thus, the benefits of the subscription service purchased under the award were received outside the grant?s period of performance. Criteria: 2 CFR Part 200 of the Uniform Guidance requires that a non-Federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance. Cause: The organization did not obtain written approval from the federal funding source to purchase a yearly subscription at the end of the period of performance for the federal award. Effect: Since the charge was incurred outside of the grant?s period of performance, the federal award did not receive the benefit of the subscription service. Questioned Costs: The total software subscription cost selected for testing and charged to the federal award program was $25,000. Recommendation: We recommend that management enhance procedures to ensure that costs recorded during the latter part of a grant are incurred within the period of performance unless written approval is obtained from the funding source. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.

Federal Agency: U.S. Department of Commerce Compliance Requirement: Allowable Costs Federal Program: 11.805 - MBDA Business Center-Coronavirus Recovery/Relief Grant Award: MB21OBD8050183 Condition/Context: For some employees working under the coronavirus grants, timesheets were submitted and approved several months after the grant period ended. As a result, payroll costs charged to the grant were based on budgeted amounts rather than actual hours worked per timely submitted timesheets. Criteria: 2 CFR 200.430(i) states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Timesheets must be submitted and approved in a timely manner. Cause: CRMSDC's internal controls over payroll charging practices for the federal program were not properly implemented to ensure timesheets were completed and approved promptly. Effect: CRMSDC's actual payroll costs per the late timesheets exceeded the budgeted amount charged to the grant. Questioned Costs: No overcharge costs resulted since CRMSDC charged less than actual supported costs. Recommendation: We recommend CRMSDC implement proper internal controls to ensure timesheets are completed, submitted, reviewed, and approved prior to payroll processing and charging payroll costs to the federal program. Supervisors should be required to review timesheets for appropriateness and accuracy. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section

Federal Agency: U.S. Department of Commerce Compliance Requirement: Period of Performance Federal Program: 11.805 - MBDA Business Center-Coronavirus Recovery/Relief Grant Award: MB21OBD8050183 Condition/Context: During FY2022, CRMSDC purchased a software subscription used to help MBEs locate state and local contract opportunities. The subscription period was from June 28, 2022 through June 27, 2023; however, the federal award ended on June 30, 2022. Thus, the benefits of the subscription service purchased under the award were received outside the grant?s period of performance. Criteria: 2 CFR Part 200 of the Uniform Guidance requires that a non-Federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance. Cause: The organization did not obtain written approval from the federal funding source to purchase a yearly subscription at the end of the period of performance for the federal award. Effect: Since the charge was incurred outside of the grant?s period of performance, the federal award did not receive the benefit of the subscription service. Questioned Costs: The total software subscription cost selected for testing and charged to the federal award program was $25,000. Recommendation: We recommend that management enhance procedures to ensure that costs recorded during the latter part of a grant are incurred within the period of performance unless written approval is obtained from the funding source. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.

Federal Agency: U.S. Department of Commerce Compliance Requirement: Allowable Costs Federal Program: 11.805 - MBDA Business Center-Coronavirus Recovery/Relief Grant Award: MB21OBD8050183 Condition/Context: For some employees working under the coronavirus grants, timesheets were submitted and approved several months after the grant period ended. As a result, payroll costs charged to the grant were based on budgeted amounts rather than actual hours worked per timely submitted timesheets. Criteria: 2 CFR 200.430(i) states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Timesheets must be submitted and approved in a timely manner. Cause: CRMSDC's internal controls over payroll charging practices for the federal program were not properly implemented to ensure timesheets were completed and approved promptly. Effect: CRMSDC's actual payroll costs per the late timesheets exceeded the budgeted amount charged to the grant. Questioned Costs: No overcharge costs resulted since CRMSDC charged less than actual supported costs. Recommendation: We recommend CRMSDC implement proper internal controls to ensure timesheets are completed, submitted, reviewed, and approved prior to payroll processing and charging payroll costs to the federal program. Supervisors should be required to review timesheets for appropriateness and accuracy. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section