Audit 387560

SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Finding #: 2025-001 Food for Peace Cluster (Assistance Listing Numbers 98.007 and 98.008) Award year ended September 30, 2025 Federal Agency: U.S. Agency for International Development Type of Finding: Allowable Costs Internal Control over Compliance (Significant Deficiency) Criteria: In accordance with 23 CFR sections 1.9, 172.11(a), 420.113(a), and 630.106(a), costs incurred under federal awards are considered allowable and reimbursable when such costs are deemed necessary and reasonable; incurred subsequent to the date of authorization to proceed and in accordance with the conditions contained in the project agreement and the plans specifications; and, not included as costs used to meet cost sharing or matching requirements, among other things. A complete system of internal controls requires all expenditures be properly approved and supported by appropriate documentation. Condition/Context: The following internal control issues were noted during testing: From a non-statistical sample of forty (40) payroll expenditures subject to testing, we identified four (4) instances where the transaction had two different versions of support (timesheets), one of which did not agree to the time charged to the grant award. Cause/Effect: Based on discussions with personnel, it was noted that the original timesheet submitted by the employee was subsequently revised during the review/approval process. While FH was able to provide the updated timesheet and tie out the amount charged to the grant award, we observed that both versions of the timesheet remain on file with no markings distinguishing the original from the final version. As it is not clear which timesheet is the original and which is the updated version the current process could result in the incorrect amount being charged to the grant awards. Questioned Costs: None noted. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: FH should remove the superseded version from the file or clearly mark it as void so that supporting documentation on file properly supports the amount charged to the grant award. Views of Responsible Official: Management identified the issue at the time and implemented corrective actions during FY2025, with no impact on costs. The revised process became effective in October 2025.