Audit 372710

Criteria or specific requirement: 2 CFR section 200.305(b)(1) requires that an entity implement procedures to ensure that the time elapsing between the transfer of federal funds to the subrecipient and the disbursement of such funds for program purposes by the subrecipient be minimized. 2 CFR section 200.305 (b)(3) states the pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the request is believed to be improper. Condition: 5 out of 18 total billings sampled were not paid timely. Questioned costs: None. Context: During our testing of subrecipient payments, 5 out of the 18 billings sampled were not paid within 30 calendar days to the subrecipient after the billing was submitted for payment. Cause: Policies and procedures were not in place to ensure timely payments of subrecipient billings. Effect: Subrecipients received payments a significant amount of time after expenditures have been incurred. Repeat Finding: Yes. Recommendation: We recommend that the Organization implement policies and procedures to ensure subrecipients are paid within 30 days of when the billing is received. If the request is believed to be improper, support for the delay in payment should be maintained. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires compliance with the provisions of procurement. Condition: The Organization has a procurement policy but the policy was not followed on all procurement transactions and documentation was not maintained of the procedures performed and approvals received for the procurement. Questioned costs: Unknown. Context: During our testing, we noted on 4 out of 5 of the samples tested there was no documentation of procurement procedures and on 5 out of 5 of the samples tested there was no documentation of review and approval. Cause: Policies and procedures are not in place to ensure proper procurement is being followed. Effect: Incorrect procurement and documentation not maintained. Repeat Finding: Yes. Recommendation: We recommend that the Organization’s procurement policy is followed and that procurement procedures are documented, reviewed and approved. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: 2 CFR Part 200, Appendix IV, Appendix IV to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit Organizations requires compliance and proper calculation of indirect costs. Condition: 1 out of 4 total billings sampled did not calculate indirect costs correctly. Questioned costs: None. Context: During our testing of indirect costs, 1 out of 4 billings was incorrectly calculated. Cause: Policies and procedures are not in place to ensure proper calculation of indirect cost. Effect: Incorrect indirect cost charged to the grant. Repeat Finding: No. Recommendation: We recommend the Organization create proper policies and procedures to ensure indirect costs are properly calculated and tracked. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: 2 CFR Section 200.329(b) requires the entity to submit performance reports with the applicable information no less than quarterly. Condition: 1 out of 2 quarterly reports tested was not submitted. Questioned costs: Unknown. Context: During our test of performance reporting requirements, we noted the Organization did not file one of the quarterly reports. Cause: Policies and procedures are not in place to ensure reports are submitted. Effect: Required performance report not submitted. Repeat Finding: No. Recommendation: We recommend the Organization create and or update policies and procedures to ensure all required reports are submitted timely and accurately. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.303 specifies that a non-federal entity must 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. Condition: The Organization did not have policies and procedures in place to ensure all the requirements of subrecipient monitoring were being performed. Questioned costs: None. Context: Of the 5 subrecipients selected for testing (there were 11 in the population), we noted that none of them had proper monitoring in place. Cause: Policies and procedures were not in place to provide adequate subrecipient monitoring. Effect: The Organization could pass through federal funding to subrecipients who are not responsible or capable recipients of the funds. Funding could be used by the subrecipients in ways that are incompatible with program goals and compliance requirements. Repeat Finding: Yes. Recommendation: We recommend that the Organization implements policies and procedures to perform subrecipient monitoring and that monitoring is formally documented and approved. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of allowable costs. Condition: 1 out of 14 transactions tested had no documentation of review and approval or client key control. Questioned costs: None. Context: Of the 14 cash disbursements tested, 1 did not have proper documentation of review and approval. Cause: Policies and procedures for cash disbursement approval were not followed. Effect: Unallowed costs or incorrect amounts could be charged to the grant. Repeat Finding: No. Recommendation: We recommend the Organization follow policies and procedures put in place in regard to the approval of cash disbursements. Views of responsible officials: There is no disagreement with the audit finding.