Audit 387410

Compliance: Activities Allowed or Unallowed and Allowable costs –Documentation of Personnel Expenses Assistance Listing Number and Title:93.566 Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Agency: U.S. Department of Health and Human Services Pass through Entity: Oklahoma Department of Human Services Pass-through Entity Award Number: N/A Finding type: Material Noncompliance and Material Weakness Criteria: Per 2 CFR200.430(i), Standards for Documentation of Personnel Expenses, employee work hours should be based on records that accurately reflect the work performed. 2 CFR200.303(a) requires non-Federal entities to establish and maintain effective internal controls over compliance with Federal laws, regulations, and the terms and conditions of Federal awards. Condition: During the course of audit, we noted the time charged to the grants was based on an estimate of efforts and did not have records to support actual time spent on grant activities. Cause: Documentation of actual time spent on grant was not captured and maintained. Effect: Failure to properly document the employee’s time may result in the submission of unallowable costs and activities causing noncompliance with federal grant guidelines. Recommendation: We recommend the Organization enforce policies and procedures to ensure that employee’s time to the grant is adequately supported.Questioned costs: Unknown. Management response: See corrective action plan on page 17.

Compliance: Activities Allowed or Unallowed and Allowable costs – Documentation of Expenses and Indirect Costs Assistance Listing Numbers and Title: 93.566 Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Agency: U.S. Department of Health and Human Services Pass through Entity: Oklahoma Department of Human Services Pass through Entity Award Number: N/A Finding type: Noncompliance and Material WeaknessCriteria: Section 2 CFR200.403(g) requires that costs must be adeduately documented to be allowable under the terms and conditions of Federal awards. Management is responsible for implementing internal controls to ensure that costs charged to the award be allowable 2 CFR 200 Subpart E, Cost Principles, requires non-Federal entities to be responsible for the efficient and effecive administration of the Federal award through sound management practices. Allowable costs include those necessary and reasonable for the performance of the award. Condition: During the course of audit, several expense lacked sufficient documentation to support the expenditures charged to the Federal award, including giftcards. Other costs were charged to the Federal award that were not allowablable costs inlcuded late fees. In addition, we noted that indirect cost charged to this grant were based on total budget amount at a monthly increment, rather than a using actual 10% de minimis indirect cost rate. Cause: This award was new to the Organization in 2022 and administrative assignments were not established immediately and management lacked sufficient knowledge on grant and compliance requirements. Effect: Failure to properly document expenditures may result in the submission of unallowable costs and activities causing noncompliance with federal grant guidelines. Failure to properly calculated de minimus cost rate based on direct costs may result in noncompliance with federal grant guidelines.Questioned cost: Known $140,051 and Projected: Unknown. Recommendation: We recommend the Organization implement procedures that costs charged to Federal awards are reviewed by staff with knowledge of allowable activities and costs principles and costs are adequately documented.Management response: See corrective action plan on page 18.