Audit 408922

Program: 97.036 Disaster Grants - Public Assistance (Presidentially Declared Disasters) Significant Deficiency: Lack of documented equipment usage supporting FEMA project worksheet costs Compliance Requirement: Allowable Costs/Cost Principles Condition/Criteria: The recipient and subrecipient must establish, document, and maintain effective internal control over Federal awards to provide reasonable assurance that costs charged to the award are allowable, allocable, and adequately supported, in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award (2 CFR §200.303(a)). The Cooperative did not retain documentation supporting the actual usage of certain equipment items—including ATVs, skid steers, and trailers— reported on FEMA project worksheets. Documentation such as equipment usage logs, assignment records, or other support demonstrating when and how the equipment was used for eligible work was not consistently maintained. Cause: The Cooperative did not have equipment usage tied to specific employees or trucks; therefore, timesheets did not reflect equipment usage in terms of hours. Effect: As a result, the Cooperative was unable to fully demonstrate the basis for equipment usage reported on the project worksheets. Questioned costs by asset include ATVs - $7,599; Loader/Skid Steer - $32,916; Equipment Trailers - $11,267; and Rear Dump Trailers - $10,287, for a total of $62,069. Recommendation: The Cooperative should implement procedures requiring equipment usage to be documented (e.g., equipment logs or assignment records) and retained for all FEMA‑related projects. Additionally, management should implement a secondary review to verify that documented equipment usage supports the amounts reported on project worksheets prior to submission.

Program: 97.036 Disaster Grants - Public Assistance (Presidentially Declared Disasters) Significant Deficiency: Non‑storm‑related costs included on FEMA project worksheet Compliance Requirement: Allowable Costs/Cost Principles Condition/Criteria: The recipient and subrecipient must establish, document, and maintain effective internal control over Federal awards to provide reasonable assurance that costs charged to the award are allowable, allocable, and related to the declared disaster, in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award (2 CFR §200.303(a)) Costs included on a FEMA project worksheet were identified that the Cooperative had intended to exclude because the work was not related to the declared storm event. In addition, certain costs from a separate invoice that was not related to the storm were inadvertently included on the project worksheet. These costs were included in the FEMA submission as prepared or finalized with the assistance of the FEMA representative. Cause: The Cooperative did not perform a review of the final project worksheet amounts to ensure that all costs included were storm‑related and agreed to the Cooperative’s internally determined eligible costs prior to submission or acceptance. Effect: As a result, non‑storm‑related costs were included on the FEMA project worksheet. The errors noted did not result in material known or likely questioned costs required to be reported. Recommendation: The Cooperative should implement procedures requiring a documented review and reconciliation of final FEMA project worksheets to underlying invoices and management’s determination of storm‑related eligible costs prior to submission or acceptance. This review should confirm that all costs included relate to the declared event and that any intended exclusions are reflected in the final submission. Bolinger,