Audit 375628

2025-001 – Internal Control over Compliance: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Identification of the Federal Program U.S. Department of Veteran Affairs Name of Program: VA Supportive Services for Veteran Families Program Assistance Listing Number: 64.033 Grant Award Number: 21-NC-237 Pass-through Identifying Number: N/A Grant Award Period: October 1, 2021 to September 30, 2025 U.S. Department of Veteran Affairs Name of Program: Staff Sergeant Parker Gordon Fox Suicide Prevention Grant Program Assistance Listing Number: 64.055 Grant Award Number: ZZ-SSG-1393-22 Pass-through Identifying Number: N/A Grant Award Period: September 30, 2023 to September 30, 2025 Criteria or Specific Requirements – In accordance with §200.303(a), Internal Controls, 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 – During our audit procedures, we observed that, for the U.S. Department of Veteran Affairs VA Supportive Services for Veteran Families (SSVF) Program, two salary and wage transactions were not supported by timesheets that had been properly approved by individuals with appropriate knowledge of the federal program. Additionally, for the U.S. Department of Veteran Affairs Staff Sergeant Parker Gordon Fox (SSG FOX) Suicide Prevention Grant Program, we noted that, for one nonpayroll expenditure selected for testing, management was unable to provide documentation demonstrating that the invoice had been reviewed and approved by a responsible party familiar with the federal program, in accordance with the Organization’s established control procedures. Cause - The Organization’s current internal control system over payroll and nonpayroll expenses is not consistently followed to ensure proper supervisory approval of timesheets and supporting invoices. Potential Effect - Charges to Federal awards for salaries and wages and nonpayroll expenses may not be accurate nor valid. Questioned costs – None Context – For the SSVF Program, we selected a sample of 60 salary transactions using non-statistical sampling methods to assess controls over allowable activities and costs. Of the transactions tested, two instances were identified in which timesheets lacked evidence of proper supervisory approval. No exceptions were noted regarding the allowability of the activities performed or the costs incurred for these transactions. We selected 60 nonpayroll transactions charged to the SSG FOX program to test controls over allowable activities and allowable costs. Out of the 60 transactions tested, there was one instance where controls did not operate effectively, i.e., an invoice was not properly approved. We did not identify any exceptions with respect to the allowability of the activities performed or the costs incurred associated with this sample selection. Repeat Finding – This is not a repeat finding. Recommendation - We recommend the Organization consistently apply its established internal controls over payroll and nonpayroll expenses to ensure that all charges to federal grants are properly approved to avoid inaccuracies or noncompliance. Views of Responsible Officials - Management agrees with the federal award findings identified in the audit and effective immediately, will implement necessary procedures as described under the corrective action plan to address the findings.