2022-001 Financial Management of Federal Awards ? Department of Health and Human Services Passed Through Research Foundation For Mental Hygiene, Inc. Opiod STR AL 93.788 ? Department of Health and Human Services Passed Through NYS OASAS Block Grants for Prevention and Treatment of Substance Abuse AL 93.959 ? Department of Health and Human Services Drug-Free Communities Support Program Grants AL 93.276 Criteria: 2CFR 200.302(b)(1) requires that entities must identify in its accounts all Federal awards received and expended, as well as the Federal programs under which they are received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the Federal award identification number and year, the name of the Federal agency and the name of the pass-through entity. 2CFR 200.303 states that entities must establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the awards are managed in compliance with statutes, regulations, and the terms and conditions of the award. Condition: The Council was not aware that the funds received under the above named grants were Federal awards and subject to the Uniform Guidance. The identification of the grant funds as Federal and the need for a Single Audit was made by the auditor engaged to perform the audit of the financial statements. There was no internal controls in place surrounding proper identification or management of Federal funding. Cause: This a new source of funding for the Council and they have not previously had experience with Single Audits or Federal requirements. Effect: If a grant recipient is not aware that funds received are Federal funds, there is a potential that they will not meet the various Federal requirements applicable to the program. This includes establishing and maintaining effective internal controls over the award, and complying with the federal statutes, regulations, terms and conditions of the awards. They will not be aware of the potential Single Audit requirement. Context: Some of the awards received were passed-through from other agencies so the initial source was not clear. Recommendation: We recommend that the Council establish a system for identifying the source of all grants. If there are Federal grants, they should educate themselves regarding the Uniform Guidance and the specific requirements of the program.
2022-001 Financial Management of Federal Awards ? Department of Health and Human Services Passed Through Research Foundation For Mental Hygiene, Inc. Opiod STR AL 93.788 ? Department of Health and Human Services Passed Through NYS OASAS Block Grants for Prevention and Treatment of Substance Abuse AL 93.959 ? Department of Health and Human Services Drug-Free Communities Support Program Grants AL 93.276 Criteria: 2CFR 200.302(b)(1) requires that entities must identify in its accounts all Federal awards received and expended, as well as the Federal programs under which they are received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the Federal award identification number and year, the name of the Federal agency and the name of the pass-through entity. 2CFR 200.303 states that entities must establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the awards are managed in compliance with statutes, regulations, and the terms and conditions of the award. Condition: The Council was not aware that the funds received under the above named grants were Federal awards and subject to the Uniform Guidance. The identification of the grant funds as Federal and the need for a Single Audit was made by the auditor engaged to perform the audit of the financial statements. There was no internal controls in place surrounding proper identification or management of Federal funding. Cause: This a new source of funding for the Council and they have not previously had experience with Single Audits or Federal requirements. Effect: If a grant recipient is not aware that funds received are Federal funds, there is a potential that they will not meet the various Federal requirements applicable to the program. This includes establishing and maintaining effective internal controls over the award, and complying with the federal statutes, regulations, terms and conditions of the awards. They will not be aware of the potential Single Audit requirement. Context: Some of the awards received were passed-through from other agencies so the initial source was not clear. Recommendation: We recommend that the Council establish a system for identifying the source of all grants. If there are Federal grants, they should educate themselves regarding the Uniform Guidance and the specific requirements of the program.
Criteria: 2CFR 200.403, Factors affecting allowability of costs, states that in order for a cost to be allowable under Federal awards it must be accorded consistent treatment. 2CFR 200.412 states that each item of cost for the same purpose must be treated consistently in like circumstances as either a direct or an indirect cost in order to avoid double-charging of Federal awards. Appendix IV to Part 200 4, Direct Allocation Method, all costs are treated as direct costs except general administration and general expenses. Under this method indirect costs consist exclusively of general administration and general expenses. 2CFR 200.425, Audit services, states the audit costs of auditing a non-federal entity that is exempted from having an audit conducted under the Single Audit Act and subpart F of this part because its expenditures under Federal awards are less than $750,000 during the non-Federal entity?s fiscal year are unallowable. 2CFR200.432, Conferences, defines allowable conferences as those necessary and reasonable for successful performance under the Federal award. Condition: A portion of the audit fee for the December 31, 2021 audit was charged as a direct expense ($423). The Council was not required to have a Single Audit for 2021, so this would not be considered allowable. A portion of the fees to send the finance director and a Board member to a conference ($750) were charged as a direct expense. Neither of these attendees were involved in the direct performance of the Federal program, so this would not be considered allowable. Costs for QuickBooks accounting software and payroll services, HR related software, and website costs ($4,047) were charged as direct costs. These are general administration expenses that should have been classified as indirect costs. Further, costs were not treated consistently within the accounting system. A portion of the audit costs, conference fees and software/computer costs were recorded as direct costs to the Federal program and a portion were recorded as indirect costs to other programs. The Organization did not have internal controls in place to meet the costs principles contained in the Uniform Guidance due to the issue discussed in Comment 2022-001. Cause: The Organization was not aware the grants received were Federal awards and they were not familiar with the cost principles contained in the Uniform Guidance. They were relying on the budget accepted by the Agency that passed them the awards. Effect: Since the 10% de minimis indirect cost rate was used, any unallowable costs that were reported as direct costs would cause the calculated indirect costs to be overstated. The grantor could request that any direct costs considered unallowable be repaid. Context: The unallowable costs noted were a minor portion of the direct costs charged to the Federal program. The program was charged approximately $463,000 of direct costs. Approximately 83% ($384,000) of the direct costs were wages, benefits and independent contractor fees for providers that worked directly for the Opiod STR program and direct rent for the program space. No exceptions we noted during our testing of these. The remaining 17% of the direct costs (approximately $79,000) were for a variety of expenses. We separated these items into 2 categories: recurring/annual charges allocated to the program of approximately $24,000 and other various costs. We tested the Organization?s allocation methodology for the identifiable recurring/annual costs. The results of this testing identified items that should have been classified as general administration indirect costs, as described above, which amounted to approximately $4,500. Testing was also done on the other various direct costs. There were 177 of these items totaling approximately $55,000. We tested a sample of 20 of these items. $750 of directly allocated costs for a conference were considered unallowable out of this testing. Questioned Costs: As a result of our testing, we concluded that the potentially unallowable costs and change in the indirect calculation would not be significantly different than the amounts discussed above and would not approach the $25,000 threshold for questioned costs. As a result, no costs have been questioned. Recommendation: We recommend that personnel involved in grant management and recordkeeping receive training on the Uniform Guidance cost principles and other pertinent Federal regulations. We recommend that a system and review process be implemented to insure that all costs are treated consistently and classified properly and that costs charged to Federal awards are appropriate. The Organization should follow the cost principles when designing budgets for future programs.
2022-001 Financial Management of Federal Awards ? Department of Health and Human Services Passed Through Research Foundation For Mental Hygiene, Inc. Opiod STR AL 93.788 ? Department of Health and Human Services Passed Through NYS OASAS Block Grants for Prevention and Treatment of Substance Abuse AL 93.959 ? Department of Health and Human Services Drug-Free Communities Support Program Grants AL 93.276 Criteria: 2CFR 200.302(b)(1) requires that entities must identify in its accounts all Federal awards received and expended, as well as the Federal programs under which they are received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the Federal award identification number and year, the name of the Federal agency and the name of the pass-through entity. 2CFR 200.303 states that entities must establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the awards are managed in compliance with statutes, regulations, and the terms and conditions of the award. Condition: The Council was not aware that the funds received under the above named grants were Federal awards and subject to the Uniform Guidance. The identification of the grant funds as Federal and the need for a Single Audit was made by the auditor engaged to perform the audit of the financial statements. There was no internal controls in place surrounding proper identification or management of Federal funding. Cause: This a new source of funding for the Council and they have not previously had experience with Single Audits or Federal requirements. Effect: If a grant recipient is not aware that funds received are Federal funds, there is a potential that they will not meet the various Federal requirements applicable to the program. This includes establishing and maintaining effective internal controls over the award, and complying with the federal statutes, regulations, terms and conditions of the awards. They will not be aware of the potential Single Audit requirement. Context: Some of the awards received were passed-through from other agencies so the initial source was not clear. Recommendation: We recommend that the Council establish a system for identifying the source of all grants. If there are Federal grants, they should educate themselves regarding the Uniform Guidance and the specific requirements of the program.
2022-001 Financial Management of Federal Awards ? Department of Health and Human Services Passed Through Research Foundation For Mental Hygiene, Inc. Opiod STR AL 93.788 ? Department of Health and Human Services Passed Through NYS OASAS Block Grants for Prevention and Treatment of Substance Abuse AL 93.959 ? Department of Health and Human Services Drug-Free Communities Support Program Grants AL 93.276 Criteria: 2CFR 200.302(b)(1) requires that entities must identify in its accounts all Federal awards received and expended, as well as the Federal programs under which they are received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the Federal award identification number and year, the name of the Federal agency and the name of the pass-through entity. 2CFR 200.303 states that entities must establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the awards are managed in compliance with statutes, regulations, and the terms and conditions of the award. Condition: The Council was not aware that the funds received under the above named grants were Federal awards and subject to the Uniform Guidance. The identification of the grant funds as Federal and the need for a Single Audit was made by the auditor engaged to perform the audit of the financial statements. There was no internal controls in place surrounding proper identification or management of Federal funding. Cause: This a new source of funding for the Council and they have not previously had experience with Single Audits or Federal requirements. Effect: If a grant recipient is not aware that funds received are Federal funds, there is a potential that they will not meet the various Federal requirements applicable to the program. This includes establishing and maintaining effective internal controls over the award, and complying with the federal statutes, regulations, terms and conditions of the awards. They will not be aware of the potential Single Audit requirement. Context: Some of the awards received were passed-through from other agencies so the initial source was not clear. Recommendation: We recommend that the Council establish a system for identifying the source of all grants. If there are Federal grants, they should educate themselves regarding the Uniform Guidance and the specific requirements of the program.
2022-001 Financial Management of Federal Awards ? Department of Health and Human Services Passed Through Research Foundation For Mental Hygiene, Inc. Opiod STR AL 93.788 ? Department of Health and Human Services Passed Through NYS OASAS Block Grants for Prevention and Treatment of Substance Abuse AL 93.959 ? Department of Health and Human Services Drug-Free Communities Support Program Grants AL 93.276 Criteria: 2CFR 200.302(b)(1) requires that entities must identify in its accounts all Federal awards received and expended, as well as the Federal programs under which they are received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the Federal award identification number and year, the name of the Federal agency and the name of the pass-through entity. 2CFR 200.303 states that entities must establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the awards are managed in compliance with statutes, regulations, and the terms and conditions of the award. Condition: The Council was not aware that the funds received under the above named grants were Federal awards and subject to the Uniform Guidance. The identification of the grant funds as Federal and the need for a Single Audit was made by the auditor engaged to perform the audit of the financial statements. There was no internal controls in place surrounding proper identification or management of Federal funding. Cause: This a new source of funding for the Council and they have not previously had experience with Single Audits or Federal requirements. Effect: If a grant recipient is not aware that funds received are Federal funds, there is a potential that they will not meet the various Federal requirements applicable to the program. This includes establishing and maintaining effective internal controls over the award, and complying with the federal statutes, regulations, terms and conditions of the awards. They will not be aware of the potential Single Audit requirement. Context: Some of the awards received were passed-through from other agencies so the initial source was not clear. Recommendation: We recommend that the Council establish a system for identifying the source of all grants. If there are Federal grants, they should educate themselves regarding the Uniform Guidance and the specific requirements of the program.
Criteria: 2CFR 200.403, Factors affecting allowability of costs, states that in order for a cost to be allowable under Federal awards it must be accorded consistent treatment. 2CFR 200.412 states that each item of cost for the same purpose must be treated consistently in like circumstances as either a direct or an indirect cost in order to avoid double-charging of Federal awards. Appendix IV to Part 200 4, Direct Allocation Method, all costs are treated as direct costs except general administration and general expenses. Under this method indirect costs consist exclusively of general administration and general expenses. 2CFR 200.425, Audit services, states the audit costs of auditing a non-federal entity that is exempted from having an audit conducted under the Single Audit Act and subpart F of this part because its expenditures under Federal awards are less than $750,000 during the non-Federal entity?s fiscal year are unallowable. 2CFR200.432, Conferences, defines allowable conferences as those necessary and reasonable for successful performance under the Federal award. Condition: A portion of the audit fee for the December 31, 2021 audit was charged as a direct expense ($423). The Council was not required to have a Single Audit for 2021, so this would not be considered allowable. A portion of the fees to send the finance director and a Board member to a conference ($750) were charged as a direct expense. Neither of these attendees were involved in the direct performance of the Federal program, so this would not be considered allowable. Costs for QuickBooks accounting software and payroll services, HR related software, and website costs ($4,047) were charged as direct costs. These are general administration expenses that should have been classified as indirect costs. Further, costs were not treated consistently within the accounting system. A portion of the audit costs, conference fees and software/computer costs were recorded as direct costs to the Federal program and a portion were recorded as indirect costs to other programs. The Organization did not have internal controls in place to meet the costs principles contained in the Uniform Guidance due to the issue discussed in Comment 2022-001. Cause: The Organization was not aware the grants received were Federal awards and they were not familiar with the cost principles contained in the Uniform Guidance. They were relying on the budget accepted by the Agency that passed them the awards. Effect: Since the 10% de minimis indirect cost rate was used, any unallowable costs that were reported as direct costs would cause the calculated indirect costs to be overstated. The grantor could request that any direct costs considered unallowable be repaid. Context: The unallowable costs noted were a minor portion of the direct costs charged to the Federal program. The program was charged approximately $463,000 of direct costs. Approximately 83% ($384,000) of the direct costs were wages, benefits and independent contractor fees for providers that worked directly for the Opiod STR program and direct rent for the program space. No exceptions we noted during our testing of these. The remaining 17% of the direct costs (approximately $79,000) were for a variety of expenses. We separated these items into 2 categories: recurring/annual charges allocated to the program of approximately $24,000 and other various costs. We tested the Organization?s allocation methodology for the identifiable recurring/annual costs. The results of this testing identified items that should have been classified as general administration indirect costs, as described above, which amounted to approximately $4,500. Testing was also done on the other various direct costs. There were 177 of these items totaling approximately $55,000. We tested a sample of 20 of these items. $750 of directly allocated costs for a conference were considered unallowable out of this testing. Questioned Costs: As a result of our testing, we concluded that the potentially unallowable costs and change in the indirect calculation would not be significantly different than the amounts discussed above and would not approach the $25,000 threshold for questioned costs. As a result, no costs have been questioned. Recommendation: We recommend that personnel involved in grant management and recordkeeping receive training on the Uniform Guidance cost principles and other pertinent Federal regulations. We recommend that a system and review process be implemented to insure that all costs are treated consistently and classified properly and that costs charged to Federal awards are appropriate. The Organization should follow the cost principles when designing budgets for future programs.
2022-001 Financial Management of Federal Awards ? Department of Health and Human Services Passed Through Research Foundation For Mental Hygiene, Inc. Opiod STR AL 93.788 ? Department of Health and Human Services Passed Through NYS OASAS Block Grants for Prevention and Treatment of Substance Abuse AL 93.959 ? Department of Health and Human Services Drug-Free Communities Support Program Grants AL 93.276 Criteria: 2CFR 200.302(b)(1) requires that entities must identify in its accounts all Federal awards received and expended, as well as the Federal programs under which they are received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the Federal award identification number and year, the name of the Federal agency and the name of the pass-through entity. 2CFR 200.303 states that entities must establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the awards are managed in compliance with statutes, regulations, and the terms and conditions of the award. Condition: The Council was not aware that the funds received under the above named grants were Federal awards and subject to the Uniform Guidance. The identification of the grant funds as Federal and the need for a Single Audit was made by the auditor engaged to perform the audit of the financial statements. There was no internal controls in place surrounding proper identification or management of Federal funding. Cause: This a new source of funding for the Council and they have not previously had experience with Single Audits or Federal requirements. Effect: If a grant recipient is not aware that funds received are Federal funds, there is a potential that they will not meet the various Federal requirements applicable to the program. This includes establishing and maintaining effective internal controls over the award, and complying with the federal statutes, regulations, terms and conditions of the awards. They will not be aware of the potential Single Audit requirement. Context: Some of the awards received were passed-through from other agencies so the initial source was not clear. Recommendation: We recommend that the Council establish a system for identifying the source of all grants. If there are Federal grants, they should educate themselves regarding the Uniform Guidance and the specific requirements of the program.