Audit 405305

Information on the federal program: United States Airforce, Assistance listing # 12.840 Civil Air Patrol Program Criteria: 2 CFR 200.318(i) states, "The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price." CAP regulation NHQ OI GC 24-02 section 18.3, states, "CAP/GCC will conduct procurement file reviews for all procurements costing $25,000 or more. The CAPF GCC-06, Procurement File Review Checklist, will be used to document the review." The Procurement File Review Checklist requires General Counsel review of all procurements over $100,000. Condition: Documentation of the procurement procedures of five purchase orders examined in the fourth quarter of the fiscal year were not complete. Cause: Controls and related responsibilities were not updated to address staffing changes in the contract and legal departments. Effect: Several components of the required documentation of five procurements examined from the fourth quarter of the fiscal year were not available upon request. Repeat Finding: No Questioned Costs: None reported. Recommendation: Documentation for each procurement should be maintained in a file by vendor. CAP's procurement file checklist should be completed retrospectively and included in the file for each procurement to ensure the completeness of the documentation. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan included at the end of the report.

Information on the federal program: United States Airforce, Assistance listing # 12.840 Civil Air Patrol Program Criteria: The Cooperative Agreement (award number FA4819-23-2-0001), Subdivision B (General Terms and Conditions for Administrative Requirements) Financial, Programmatic, and Property Reporting (REP), REP Article II: Financial Reporting, section C, states, "You must submit the final financial report under this award no later than 120 calendar days after the end date of the period of performance." Condition: The SF-425 was not submitted within the required time frame. Cause: The controls related to timely submission of Form SF-425 did not operate effectively. Effect: Reporting requirements for Form SF-425 were not met with respect to timely filing. Repeat Finding: No Questioned Costs: None reported. Recommendation: We recommend CAP strengthen its policies and procedures surrounding grant reporting to include a file and documented review of the timely filed copies of all required reports. The documented review should be performed and approved by someone other than the preparer. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan included at the end of the report.

Information on the federal program: United States Airforce, Assistance listing # 12.840 Civil Air Patrol Program Criteria: 2 CFR 200.430(g)(1)(vi) states, "Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on a Federal award and non-Federal award." Condition: A review of all non-Federal travel costs identified six instances in which non-Federal payroll expenses were incorrectly charged to Federal funding. Additionally, one employee hired in the fourth quarter should have received a standard non-Federal payroll allocation but did not, while another employee hired during the same period received this allocation in error. The related unallowable costs totaled $13,800. These issues were communicated to management, who plan to fully reimburse the Federal Government by June 30, 2026. Cause: Time allocation procedures were not consistently followed at the employee level. Effect: Non-Federal activities were charged to Federal funding. Repeat Finding: No Questioned Costs: None reported. Recommendation: Procedures around time allocation should be examined for potential automation based on non-Federal expenditures postings and regular communications of time allocation requirements to employees should be increased. A review of regular payroll allocations should be performed quarterly to ensure they agree to the current duties and responsibilities of employees. This review should be performed and documented by someone other than the preparer. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan included at the end of the report.