Audit 408878

Inadequate Internal Controls Over Monthly Grant Billings and Allowable Costs Condition- Internal controls over the prepara􀆟on and review of monthly grant invoices were not sufficient to prevent or detect misstatements in a timely manner. Criteria - Charges to federal awards for fringe benefits must be based on actual allowable expenditures and supported by a system of internal controls that provide reasonable assurance that costs are accrurate, allowable, and properly supported. Cause - A misunderstanding of allowable fringe benefit costs led to the use of a fixed fringe rate rather than actual allowable fringe costs by employee. Effect - The CEO solely prepared and submitted the monthly grant billings, which eliminated segregation of duties and independent review. This lack of oversight allowed billing errors to continue throughout the fiscal year, resulting in a net overbilling of $27,149. Recommendation - Monthly grant billings should be prepared by the Director of Operations and reviewed by the CEO prior to submission. This will establish segregation of duties and reduce the risk of billing errors. In addition, management should implement a quarterly oversight review by the board to confirm that allowable cost requirements are being followed. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding and the recommendation. See Corrective Action Plan on page 12. Questioned Costs: Department of Health and Human Services $ 27,149 Temporary Assistance for Needy Families - Assistance Listing No. 93.558 Significant Deficiency. The significant deficiency at Finding 2025-001 also applies to this grant.