Audit 388639

U.S. Department of Justice/Passed-Through Texas Office of the Governor Crime Victim Assistance Federal Assistance Listing Number: 16.575 – Common Thread - Texas Award Number: 3853406 Award Year: September 1, 2024 – October 31, 2025 Criteria or Specific Requirement: Matching – Under 2 CFR § 200.306, cost sharing/matching must be allowable, verifiable, properly valued, within the period of performance, and adequately documented. 2 CFR § 200.302 requires accurate, current, complete financial records. 2 CFR § 200.430 requires records that support compensation and time worked. Texas Office of the Governor's (OOG) program guidance further requires set rates, timekeeping, and preconditions when employee on‑call is used as in‑kind (not the same or similar duties; voluntary participation). Condition: BCFS HHS did not comply with matching requirements. Reported match included (1) unpaid employee on‑call hours without required timekeeping and (2) over‑valued volunteer/intern hours, including some ineligible activities. Subsequent discussions with OOG indicate approximately $850,000 of match is unallowable and will require correction through repayments and/or budget reductions. Cause: The prior program executive director deviated from using the in-kind match plan that had been previously approved by the public safety officer (PSO) – utilizing exempt personnel; taking “on-call” (answering phones) after hours, performing duties different from their normal work duties, could be considered as volunteer hours and count towards in-kind match. During 2022 (COVID-19 pandemic), PSO waived match requirements, the program executive director hired overnight on-call workers, believed to be due to increase in call volume. Following the pandemic, the PSO discontinued the match wavier in October 2024. The program executive director failed to reassign the on-call workers, resulting in a compromise of the in-kind match plan. BCFS HHS’ documentation and valuation practices in place during the period were not fully aligned with the specific documentation, rate‑setting, and classification requirements outlined in Office of the Governor’s (OOG) monitoring guidance. Effect or Potential Effect: Reported match was overstated, requiring budget and reporting corrections in the E-grants system, and may result in repayment or additional local match to cure the deficit. Questioned Costs: $853,982. Calculated from OOG’s identification of disallowed/questioned match related to on‑call, volunteer, and intern match; and BCFS HHS’ internal calculation of anticipated corrections, including indirect cost adjustments and the expected reclassification of mileage and training amounts. Context: Match claimed on FSRs for period 10/1/2024–8/31/2025 under Grant 3853406; OOG review covered 10/1/2024–2/28/2025 with extrapolation through August for cash match. Repeat Finding: None. Recommendation: We recommend BCFS HHS 1) Implement a board‑approved on‑call policy that complies with OOG and Uniform Guidance; 2) Re‑value all in‑kind hours using approved rates; 3) Remove or reclassify any unallowable match; 4) Obtain pass‑through approval for unrecovered indirect used as match; and 5) Strengthen internal controls over timekeeping, valuation, and reporting. Views of Responsible Officials and Corrective Action: Management concurs with the finding and is working with the OOG on an approved remediation plan that includes application of unrecovered indirect, and reduction of other allowable costs to cure the match deficit. See further information on the corrective action plan provided by management.