Audit 396885

Federal Agency: U.S Department of Health and Human Services Federal Program Name: Community Services Block Grant Assistance Listing Number: 93.569 Federal Award Identification Number and Year: 2401NCCOSR-2025 Award Period: July 1, 2024 through June 30, 2025 • Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: Under 2 CRF 200.406, credits accruing to or received by the recipient of federal funding that relate to allowable costs must be credited to the Federal award as either a cost reduction or cash refund. Condition: During our testing, we noted the Corporation received reimbursement for the full amount of an expenditure that included sales tax, despite the sales tax having been reimbursed separately by the State. Questioned costs: $108 Context: During our testing of 60 samples, we noted 2 expenditures that incorrectly charged sales tax to the grant totaling $108. Extrapolated to the entire population, an estimated $267 of expenditures would be incorrectly applied to the grant. Management has asserted this is the only instance of this issue. Cause: The Corporation did not have adequate internal controls designed to properly determine the appropriate amounts to be submitted for reimbursement. Effect: Noncompliance with the federal requirements around the determination of an eligible expenditure. Recommendation: We recommend the Corporation review the expenditures submitted to Supportive Services for Veteran Families and ensure that there is no "double dipping” of sales taxes. Views of responsible officials: Management agrees with the finding. Management believes the issue resulted from timing overlap with the prior year audit, as the transactions occurred in July and August 2024, shortly after fiscal year‑end June 30, 2024. To address this matter, management has retrained existing staff and is in the process of training the new CFO. In addition, management has performed a re‑review of accounting records to confirm that no other instances of sales tax misclassification have occurred.