Audit 395434

Finding 2025-001: Indirect Costs Federal Agency: Department of Justice Federal Program: Second Chance Act Community-based Reentry Program Assistance Listing Number: 16.812 Federal Award Identification Number and Year: 15PBJA-23-GK-05505-SCAX - 2025; 15PBJA-23-GG-05285-SCAX - 2025 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: October 1, 2023 through September 30, 2026 Compliance Requirement Affected: Allowable Costs Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement Title 2 CFR Section 200.414 requires that indirect costs charged to Federal awards be allowable, properly allocated in accordance with an approved indirect cost rate methodology. The costs need to be adequately documented and effective internal controls be established and maintained over the preparation, review, and approval of indirect cost allocations. Condition For one of the three months selected for indirect cost testing, one month’s calculation did not have documentation as to who prepared, reviewed, and approved the calculation. Questioned costs None Context Condition occurred within one month’s indirect cost calculation out of 3 tested. Cause Established controls related to segregation of duties over the preparation and review of indirect cost allocations were not followed. Effect The absence of documented review increases the risk that errors in indirect cost allocations may not be detected in a timely manner, which could result in unallowable or inaccurate costs being charged to the Federal program. Repeat Finding This is not a repeat finding. Recommendation We recommend that TASC follow its established procedures for segregation of duties over the calculation of indirect cost allocations. Views of Responsible Officials There is no disagreement with this finding. Management will follow established procedure to make sure that segregation of duties over the calculation of indirect cost allocations is properly documented. Management will review the procedure with all accounting staff.

Finding 2025-002: Subrecipient Payments Federal Agency: Department of Justice Federal Program: Second Chance Act Community-based Reentry Program Assistance Listing Number: 16.812 Number and Year: 15PBJA-23-GK-05505-SCAX - 2025; 15PBJA-23-GG-05285-SCAX - 2025 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: October 1, 2023 through September 30, 2026 Compliance Requirement Affected: Cash management Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement Title 2 CFR Section 200.309 requires that costs, including subrecipient payments, charged to a Federal award be incurred during the award’s period of performance. Condition For one of the eight subrecipient disbursements selected, costs for subrecipient services that were performed outside of the applicable period of performance were charged to the Federal program. Questioned costs $10,487 Context There was a breakdown in TASC's internal controls over cutoff of expenses which caused an unallowable expense based on timing of work performed to be included in the SEFA. Cause Established internal controls to ensure the recognition of subrecipient costs within the proper period of performance were not consistently followed. Effect Costs outside of the period of performance could be inappropriately charged to the Federal program, which did occur in this case resulting in questioned costs. Repeat Finding This is not a repeat finding. Recommendation We recommend that TASC follow its established procedures for charging allowable expenses to the grant during the period of performance. Views of Responsible Officials There is no disagreement with this finding. Management will follow established procedure to make sure costs are recorded in the proper period. Management will review the procedure with all accounting staff.