Audit 50109

Section III ? Federal Award Findings and Questioned Costs Federal Agency: U.S. Department of the Treasury Reference Number: 2022-001 Program: COVID 19 - Coronavirus State and Local Fiscal Recovery Funds CFDA: 21.027 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowability: Indirect and Direct Costs Criteria Except for those nonfederal entities described in 2 CFR part 200, Appendix VII, paragraph D.1.b, if a nonfederal entity has never received a negotiated indirect cost rate, it may elect to charge a de minimis rate of 10 percent of modified total direct costs (MTDC). Effective on November 12, 2020, any nonfederal entity can use the de minimis rate. Such a rate may be used indefinitely or until the nonfederal entity chooses to negotiate a rate, which the nonfederal entity may do at any time. If a nonfederal entity chooses to use the de minimis rate, that rate must be used consistently for all of its federal awards. Also, as described in 2 CFR section 200.403, costs must be consistently charged as either indirect or direct cost, but may not be double charged or inconsistently charged as both. No documentation is required to justify using the de minimis rate. Condition In connection with our review of the indirect cost charges we noted that the 10% indirect cost rate allowed by the State of Delaware was applied to the organization?s indirect cost pool as opposed to its modified total direct costs. In addition, it was also determined there were additional direct costs that should have been allocated to the grant. Based upon revisions to items noted above, the grant had net overcharges amounting to $ 6,974. Cause The organization inadvertently used the wrong base when charging its indirect cost percentage which resulted in an overcharge of indirect costs. Effect, including perspective The organization did not comply with the specific requirements of Federal Regulations in respect to charging its indirect rate percentage to the correct base. Accordingly expenditures of $ 6,974 were overcharged from the total of $ 704,273 expended for the program for the year ended June 30, 2022. Questioned Costs Net questioned costs amounted to $ 6,974. Identification of Repeat Finding This is not a repeat finding. Recommendation We recommend management strengthen its controls over the charges related to its indirect costs and ensure it has properly accounted for all direct and indirect costs. In addition, we recommend the organization reduce its next draw from the program by the overcharged amount. Views of responsible officials and planned corrective actions See attached for views of responsible officials and the organization?s Corrective Action Plan.

Section III ? Federal Award Findings and Questioned Costs Federal Agency: U.S. Department of the Treasury Reference Number: 2022-001 Program: COVID 19 - Coronavirus State and Local Fiscal Recovery Funds CFDA: 21.027 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowability: Indirect and Direct Costs Criteria Except for those nonfederal entities described in 2 CFR part 200, Appendix VII, paragraph D.1.b, if a nonfederal entity has never received a negotiated indirect cost rate, it may elect to charge a de minimis rate of 10 percent of modified total direct costs (MTDC). Effective on November 12, 2020, any nonfederal entity can use the de minimis rate. Such a rate may be used indefinitely or until the nonfederal entity chooses to negotiate a rate, which the nonfederal entity may do at any time. If a nonfederal entity chooses to use the de minimis rate, that rate must be used consistently for all of its federal awards. Also, as described in 2 CFR section 200.403, costs must be consistently charged as either indirect or direct cost, but may not be double charged or inconsistently charged as both. No documentation is required to justify using the de minimis rate. Condition In connection with our review of the indirect cost charges we noted that the 10% indirect cost rate allowed by the State of Delaware was applied to the organization?s indirect cost pool as opposed to its modified total direct costs. In addition, it was also determined there were additional direct costs that should have been allocated to the grant. Based upon revisions to items noted above, the grant had net overcharges amounting to $ 6,974. Cause The organization inadvertently used the wrong base when charging its indirect cost percentage which resulted in an overcharge of indirect costs. Effect, including perspective The organization did not comply with the specific requirements of Federal Regulations in respect to charging its indirect rate percentage to the correct base. Accordingly expenditures of $ 6,974 were overcharged from the total of $ 704,273 expended for the program for the year ended June 30, 2022. Questioned Costs Net questioned costs amounted to $ 6,974. Identification of Repeat Finding This is not a repeat finding. Recommendation We recommend management strengthen its controls over the charges related to its indirect costs and ensure it has properly accounted for all direct and indirect costs. In addition, we recommend the organization reduce its next draw from the program by the overcharged amount. Views of responsible officials and planned corrective actions See attached for views of responsible officials and the organization?s Corrective Action Plan.