Program Name: 93.778 Medicaid Cluster Description: Unallowable Costs and Reporting Condition and Criteria: The District charged payroll costs to the Medicaid program that were also charged to another federal program (IDEA Flow-Through), resulting in duplicate federal reimbursement for the same expenditures (“double-dipping”). Under 2 CFR 200.403 and 2 CFR 200.405, costs must be allocable to a single federal award and must not be charged to multiple programs. During audit testing of payroll charges, we identified employees whose salaries were allocated to both the Medicaid and IDEA Flow-Through programs for overlapping pay periods. Effect: The District’s internal controls failed to prevent or detect duplicate charges of federal payroll costs, resulting in noncompliance with federal cost principles and inaccurate Medicaid claiming. Cause: The condition resulted from control deficiencies in the District’s implementation of the new Skyward “Qmlative” accounting system. Specifically, the District did not select a configuration setting (“cross-reference other federal codes”) necessary to prevent duplicate allocations when importing payroll data for Medicaid claiming. Additionally, the District’s quarterly payroll review procedures focused on verifying employee totals rather than reconciling detailed payroll allocations across federal programs, which contributed to the oversight. Questioned Costs: $345,925 (projected) Auditors’ Recommendation: We recommend that the District strengthen internal controls over payroll cost allocation and Medicaid claiming to ensure that costs are charged to only one federal program. Specifically, the District should review and update the Skyward Qmlative configuration to properly identify and exclude payroll costs already charged to other federal projects, and implement detailed quarterly review procedures to verify that payroll data reconciles across all federal program codes. Views of Responsible Officials and Corrective Action Plan: See attachment for District’s corrective action plan.
Federal Agency: National Science Foundation Federal Program Name: Research and Development Cluster Assistance Listing Number: 47.076 Federal Award Identification Number and Year: R&D - 2025 Award Period: June 1, 2024 to May 31, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations 2 CFR Part 200, Subpart E, requires that expenses be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principals (200.403(a)) and allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to the Federal award or cost objective in accordance with relative benefits received (200.405). Condition: We noted that one out of 8 items selected for period of performance was incorrectly coded to an R&D grant. Questioned costs: $100 Context: The University's review and internal controls over R&D grant charges did not identify an expense that had been incorrectly coded. Cause: The University’s processes and controls did not ensure that all expenses charged to R&D grants were valid R&D expenditures. Effect: An incorrect amount of R&D expenditures was drawn down. Repeat Finding: No Recommendation: We recommend that the University review its procedures around review and approval of R&D expenditures to ensure that only valid expenditures are reported. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-007 – Allowable Costs (Significant Deficiency and Non-compliance)(Repeat finding) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act (VOCA) Criteria: 2 CFR 200.405 establishes requirements for costs allocated to a grant award. These requirements include that costs must be approximated using a reasonable method. Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 non-payroll, there was 1 instance in which the cost allocated was not properly documented or supported by a reasonable method. Cause: Expense allocated to the VOCA grant was not properly supported. Effect: The Organization did not adequately document allocation methods required by allowable cost compliance requirements. Questioned costs: $216 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.
Item: 2024-001 Assistance Listing Number: 93.914 Program: HIV Emergency Relief Project Grants Federal Agency: U.S. Department of Health and Human Services Pass-Through Agencies: Maricopa County Department of Public Health Services Pass-Through Grantor Identifying Number: A23MHSSWC, A24MHSSWC, A23MNSSWC, A24MNSSWC, A23MCMSWC, A24MCMSWC, A23NMCSWC, A24NMCSWC, A23FBMSWC, A24FBMSWC, A24SASSWC Award Year: March 1, 2023 - February 28, 2024; March 1, 2024 - February 28, 2025 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.405 – Allocable Costs - (d) If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. Condition: Costs charged to the federal program were based on an allocation methodology that was not properly updated for the current period. Questioned Costs: $865 Context: During testing of non-payroll costs charged to the program, we received a report from the organization showing the variances between expenses allocated for reimbursement to the program using an incorrect allocation methodology, and the correct amounts that should have been allocated. The variance between the amounts charged and the amounts incurred by the tested program, $10,869 and $10,004, respectively, was $865, which is trivial in nature. However, this is a repeat finding and is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls was not properly implemented. Cause: Turnover within key positions of the organization resulted in insufficient documentation and/or inadequate implementation of the control procedures. Additionally, issue not discovered until prior year audit discovery in August 2024. Identification as a Repeat Finding: Repeat finding – prior year 2023-002 Recommendation: The Organization should enhance its processes and controls to ensure that cost allocation methodologies utilized to bill federal awards are properly updated each reporting period as deemed necessary to accurately reflect the proportional benefit. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.
Item: 2024-002 Assistance Listing Number: 93.940 Programs: HIV Prevention Activities Health Department Based Federal Agency: U.S. Department of Health and Human Services Pass-Through Agencies: Arizona Department of Health Services Pass-Through Grantor Identifying Number: 252026/152034 Award Year: August 1, 2023 – April 30, 2024; January 1, 2024 – May 31, 2025; May 1, 2024 – April 30, 2025 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.405 – Allocable Costs - (d) If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. Condition: Costs charged to the federal program were based on an allocation methodology that was not properly updated for the current period. Questioned Costs: $1,835 Context: In a population of over 109 non-payroll costs charged to the program, we conducted a non-statistical sample of 11 non-payroll costs charged to the program. In our sample of 11, we noted that 1 selection was charged to the program based on an allocation methodology that was not properly updated for the current period. The variance between the amounts charged and the amounts supported, $3,260 and $1,425, respectively, was $1,835, which is trivial in nature. However, this is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls was not properly implemented. Cause: Turnover within key positions of the organization resulted in insufficient documentation and/or inadequate implementation of the control procedures. Additionally, issue not discovered until prior year audit discovery in August 2024. Identification as a Repeat Finding: Not a repeat finding Recommendation: The Organization should enhance its processes and controls to ensure that cost allocation methodologies utilized to bill federal awards are properly updated each reporting period as deemed necessary to accurately reflect the proportional benefit. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
Finding 2024-007 – Allowable Costs (Significant Deficiency and Non-compliance)(Repeat finding) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act (VOCA) Criteria: 2 CFR 200.405 establishes requirements for costs allocated to a grant award. These requirements include that costs must be approximated using a reasonable method. Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 non-payroll, there was 1 instance in which the cost allocated was not properly documented or supported by a reasonable method. Cause: Expense allocated to the VOCA grant was not properly supported. Effect: The Organization did not adequately document allocation methods required by allowable cost compliance requirements. Questioned costs: $216 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.
Item: 2024-001 Assistance Listing Number: 93.914 Program: HIV Emergency Relief Project Grants Federal Agency: U.S. Department of Health and Human Services Pass-Through Agencies: Maricopa County Department of Public Health Services Pass-Through Grantor Identifying Number: A23MHSSWC, A24MHSSWC, A23MNSSWC, A24MNSSWC, A23MCMSWC, A24MCMSWC, A23NMCSWC, A24NMCSWC, A23FBMSWC, A24FBMSWC, A24SASSWC Award Year: March 1, 2023 - February 28, 2024; March 1, 2024 - February 28, 2025 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.405 – Allocable Costs - (d) If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. Condition: Costs charged to the federal program were based on an allocation methodology that was not properly updated for the current period. Questioned Costs: $865 Context: During testing of non-payroll costs charged to the program, we received a report from the organization showing the variances between expenses allocated for reimbursement to the program using an incorrect allocation methodology, and the correct amounts that should have been allocated. The variance between the amounts charged and the amounts incurred by the tested program, $10,869 and $10,004, respectively, was $865, which is trivial in nature. However, this is a repeat finding and is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls was not properly implemented. Cause: Turnover within key positions of the organization resulted in insufficient documentation and/or inadequate implementation of the control procedures. Additionally, issue not discovered until prior year audit discovery in August 2024. Identification as a Repeat Finding: Repeat finding – prior year 2023-002 Recommendation: The Organization should enhance its processes and controls to ensure that cost allocation methodologies utilized to bill federal awards are properly updated each reporting period as deemed necessary to accurately reflect the proportional benefit. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.
Item: 2024-002 Assistance Listing Number: 93.940 Programs: HIV Prevention Activities Health Department Based Federal Agency: U.S. Department of Health and Human Services Pass-Through Agencies: Arizona Department of Health Services Pass-Through Grantor Identifying Number: 252026/152034 Award Year: August 1, 2023 – April 30, 2024; January 1, 2024 – May 31, 2025; May 1, 2024 – April 30, 2025 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.405 – Allocable Costs - (d) If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. Condition: Costs charged to the federal program were based on an allocation methodology that was not properly updated for the current period. Questioned Costs: $1,835 Context: In a population of over 109 non-payroll costs charged to the program, we conducted a non-statistical sample of 11 non-payroll costs charged to the program. In our sample of 11, we noted that 1 selection was charged to the program based on an allocation methodology that was not properly updated for the current period. The variance between the amounts charged and the amounts supported, $3,260 and $1,425, respectively, was $1,835, which is trivial in nature. However, this is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls was not properly implemented. Cause: Turnover within key positions of the organization resulted in insufficient documentation and/or inadequate implementation of the control procedures. Additionally, issue not discovered until prior year audit discovery in August 2024. Identification as a Repeat Finding: Not a repeat finding Recommendation: The Organization should enhance its processes and controls to ensure that cost allocation methodologies utilized to bill federal awards are properly updated each reporting period as deemed necessary to accurately reflect the proportional benefit. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act, ARP Supplemental and ARP Covid-19 Federal Assistance Listing Number: 93.558 and 93.671 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS000380000040 Criteria: Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and terms and conditions of the award. Adequate written policies and procedures are a critical component of an effective internal control system. Condition: During our review of the Center’s fiscal policies and procedures, we noted that several key elements required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically, the following areas were underdeveloped: Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112. Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well documented. Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed. Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined. While some general policies were in place, they do not currently meet the level of specificity and comprehensiveness required under the Uniform Guidance. Cause: The Center is in the process of updating its financial policies and procedures to comply with Uniform Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected to be finalized and approved by the Board of Directors in August 2025. Effect: The lack of complete and detailed policies increases the risk of noncompliance with federal requirements, especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates challenges in ensuring consistent and compliant financial practices across the Center. Questioned Costs: $0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents a control deficiency. Recommendation: We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will strengthen internal controls and help ensure compliance moving forward. Management’s Views and Corrective Action Plan: Management agrees with the finding. The Center is currently in the process of updating its fiscal policies and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this effort and is reviewing each policy area identified, including conflict of interest, allowable costs, subrecipient monitoring, and record retention. Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025. Once approved, the Center will ensure implementation across all departments and provide internal guidance to promote consistent application. Anticipated Completion Date: August 30, 2025 Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.
2024-001: Activities Allowed or Unallowed & Allowable Costs/Cost Principles - Material Weakness in Internal Control and Material Noncompliance Repeat of Prior Audit Finding 2023-001 Federal Program: Trans-National Crime Federal Agency: U.S. Department of State - Bureau of International Narcotics and Law Enforcement Affairs Federal Assistance Listing Number: 19.705 Federal Award Year: December 31, 2024 Criteria: 2 CFR section 200.303(a) of the Uniform Guidance requires all non-Federal entities to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. In addition, 2 CFR sections 200.405 and 200.403(g) require federal awards be expended only for allowable activities and be adequately documented, respectively. Condition/Context: The Corporation was unable to provide a signed contract or reconciliation to evidence allowability of the expenditures or documentation of review and approval for the following: • For 5 out of 40 selections, no evidence of approval of signed contract could be provided (control). • For 6 out of 40 selections, no evidence of signed contract or reconciliation support could be provided (compliance). This was not a statistically valid sample. Questioned Costs: Questioned costs were approximately $19,428. Cause: The Corporation did not retain/could not retrieve the signed contract or due to poor document retention. Effect: The Corporation has not complied with the specific requirements for activities allowed or unallowed and allowable costs/cost principles as described in the Uniform Guidance. Unallowable costs may have been charged to the federal program. Recommendation: We recommend that the Corporation review its process and implement procedures that would allow management to properly maintain all required documentation on its federal expenditures. Views of Responsible Officials: The Corporation has sustained and built upon the improvements achieved in 2023, maintaining a reduced occurrence of the findings noted in prior audits. The HR solution, Rippling, implemented in 2024, continues to be an integral part of ensuring that all agreements and rate changes are accurately tracked and fully documented. This system has strengthened the Corporation’s document retention practices and supported ongoing compliance with federal regulations. The rollout of Rippling’s timesheet module was completed for all of the Corporation’s South American entities, Central America, UK, France, Gabon and Senegal. The Corporation continued roll out into 2025 and completed that for all remaining entities including Thailand, Malaysia, UAE, Saudia Arabia, Central and South Africa.
Finding 2024-001 - Activities Allowed or Unallowed & Allowable Costs/Cost Principles (Internal Control over Compliance/Compliance) ALN No.: 93.696 - Certified Community Behavioral Health Clinic Expansion Grants Award Year: January 1, 2024 – December 31, 2024 Federal Agency: United States Department of Health and Human Services Pass Through Entity: Not applicable Criteria: 2 CFR Part 200.303(a) of the Uniform Guidance requires all non-Federal entities to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. In addition, 2 CFR section 200.405 requires federal awards be expended only for allowable activities. Condition/Context: South Shore made a clerical error in calculating allocated payroll amount claimed for one selection tested out of 60 selections leading to an error of $108. The sampling method was nonstatistical sampling. Cause: There was no proper review and oversight over the individual preparing the monthly claims for reimbursement. Effect: South Shore has not complied with the specific requirements for activities allowed or unallowed and allowable costs/cost principles as described in the Uniform Guidance. Unallowable costs were charged to the federal program. Questioned Costs: None. Recommendation: South Shore should enhance its internal control processes related to preparation and review of the monthly claim for reimbursement.
FINDING 2024-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Subrecipient Monitoring Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): SLFRP1096 Compliance Requirement: Subrecipient Monitoring Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 19 CITY OF ANDERSON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Subrecipients associated with the City's Non-profit, Affordable Housing, and Homeless Initiatives activities funded by the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds were required to submit reports on program activities either quarterly or monthly. The City did not have adequate internal controls in place designed to ensure that these reports were reviewed. Responsibility for reviewing these reports rested primarily with one employee. For two of three subrecipients tested, we were not able to determine that there was a second employee involved that would ensure that the reports submitted by the subrecipients were reviewed by the City. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.332 states: "All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and include the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward notification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; INDIANA STATE BOARD OF ACCOUNTS 20 CITY OF ANDERSON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the passthrough entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the passthrough entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R&D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. (4) (i) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the passthrough entity must determine the appropriate rate in collaboration with the subrecipient, which is either: (A) The negotiated indirect cost rate between the pass-through entity and the subrecipient; which can be based on a prior negotiated rate between a different PTE and the same subrecipient. If basing the rate on a previously negotiated rate, the pass through entity is not required to collect information justifying this rate, but may elect to do so; (B) The de minimis indirect cost rate. (ii) The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a Federally approved rate. Subrecipients can elect to use the cost allocation method to account for indirect costs in accordance with § 200.405(d). INDIANA STATE BOARD OF ACCOUNTS 21 CITY OF ANDERSON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (5) A requirement that the subrecipient permit the pass-through entity and auditors to have access to the subrecipient's records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (6) Appropriate terms and conditions concerning closeout of the subaward. . . . (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in § 200.208. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. INDIANA STATE BOARD OF ACCOUNTS 22 CITY OF ANDERSON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings. If a subrecipient has a current Single Audit report posted in the Federal Audit Clearinghouse and has not otherwise been excluded from receipt of Federal funding (e.g., has been debarred or suspended), the pass-through entity may rely on the subrecipient's cognizant audit agency or cognizant oversight agency to perform audit follow-up and make management decisions related to cross-cutting findings in accordance with section § 200.513(a)(3)(vii). Such reliance does not eliminate the responsibility of the pass-through entity to issue subawards that conform to agency and award-specific requirements, to manage risk through ongoing subaward monitoring, and to monitor the status of the findings that are specifically related to the subaward. (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program related matters; and (2) Performing on-site reviews of the subrecipient's program operations. (3) Arranging for agreed-upon-procedures engagements as described in § 200.425. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations." Cause A system of internal controls to include oversite and review of the quarterly or monthly reports prepared by the subrecipients was not in place. One individual was primarily responsible for reviewing the subrecipient reports. Effect Not having procedures in place for oversite and review of the monitoring reports could lead to noncompliance with the requirements for subrecipient monitoring. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. INDIANA STATE BOARD OF ACCOUNTS 23 CITY OF ANDERSON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City establish a proper system of internal controls to include oversite and review to ensure that the subrecipient report reviews are reviewed/approved by a second party. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
CDBG AL# 14.218 Allowable Costs Condition: Allegheny County Economic Development (ACED) charges CDBG program accounts for the salary and related fringe benefits of numerous employees, including employees that do not work full time on the CDBG program. Hours for each employee are tracked by the program(s) the employee works on each day. ACED needs to calculate the salary and benefit amounts for time not related to CDBG, charge the proper non-CDBG program, and reduce the CDBG program expense, based on these hours. ACED indicated these cross-charges are done on a quarterly basis. We tested salary and benefit cross-charges for one quarter of calendar year 2024 and recalculated the non-CDBG salary and benefit amounts using ACED time reports, salary information, and JDE fringe benefit reports. Based on our calculation, we noted $249,390 in salaries and fringe benefits were charged to the CDBG program for time not worked on CDBG. Of this amount, ACED did not record the cross charges or reduce program expenses by $127,289. Although ACED provided supporting documentation that CDBG expenses were reduced by the remaining $122,101, these entries were not recorded in JDE until 2025 (see also finding 2024-011). Criteria: Allowable costs include those that are incurred specifically for the Federal award (2 CFR Part 200 Subpart E -Cost Principles (2 CFR 200.405.a.1). Cause: ACED has a process to cross-charge time not worked on CDBG to the proper program, but due to department turnover, these cross-charges were not properly completed, or were not completed timely. This is a repeat finding from the prior year. Effect: The County was not in compliance with the terms of the federal grant program. Questioned Costs: $127,289 Recommendation: ACED should establish procedures to ensure that all cross-charges are properly calculated and completed in a timely manner. Management Response: Management agrees with the finding, see attached Corrective Action Plan.
CDBG AL# 14.218 Allowable Costs Condition: Throughout our testing, we found expenditures totaling $150,550 that were not recorded in the proper accounting period. One of the 41 CDBG non-payroll expenditures tested for 2024, in the amount of $16,079, was a 2023 expenditure that was not properly accrued in 2023. One expenditure in the amount of $12,370 was included in the CDBG-CV PR07 report in 2024, but due to a miscommunication, it was not recorded in JDE until 2025. Cross-charges totaling $122,101 to reduce non-CDBG salary and fringe benefits costs recorded as CDBG expenditures in the fourth quarter of 2024 were not recorded in JDE until 2025. Criteria: Allowable costs include those that are incurred specifically for the Federal award (2 CFR Part 200 Subpart E -Cost Principles (2 CFR 200.405.a.1). Cause: ACED has a process to accrue expenditures, but due to department turnover, accruals were not properly completed for these transactions. Effect: The County was not in compliance with the terms of the federal grant program. Questioned Costs: None. Recommendation: ACED should implement procedures to ensure that expenditures and crosscharges are properly accrued for in the correct period. Management Response: Management agrees with the finding, see attached Corrective Action Plan.
Criteria – According to 2 CFR § 200.403, 2 CFR § 200.405, and 2 CFR § 200.405, costs charged to federal awards must be allowable, reasonable, and allocable. Specifically, costs must be necessary and reasonable for the performance of the federal award, must conform to limitations and exclusions set forth in the cost principles, must be consistent with policies that apply uniformly to both federally financed and other activities, and costs must comply with the terms and conditions of the federal award. Federal funds must also only be used for expenditures incurred during the award period. Condition – During our review of expenditures charged to the Crime Victim Assistance (VOCA) grant, we noted that management charged an expense prior to the completion of the project. The expense was allowable under the grant, but the timing of the charge did not align with when the activity occurred. Cause – The premature charge occurred due to management attempting to use the remaining grant funds for that period before they expired. Questioned Cost Amount – Based on deviations noted in our testwork the projected likely questioned costs resulting in noncompliance are as follows: Crime Victim Assistance (VOCA), 16.575: $74,661. Effect – The Organization was not in compliance with the requirements listed above. Recommendation – We recommend the Organization review and reinforce policies regarding timing of cost obligations and expenditures and ensure expenses are recorded in alignment with when the related activity occurs. View of Responsible Officials – Management agrees with the finding. Corrective Action Plan – See attached corrective action plan from management.
Criteria – According to 2 CFR § 200.403, 2 CFR § 200.405, and 2 CFR § 200.405, costs charged to federal awards must be allowable, reasonable, and allocable. Specifically, costs must be necessary and reasonable for the performance of the federal award, must conform to limitations and exclusions set forth in the cost principles, must be consistent with policies that apply uniformly to both federally financed and other activities, and costs must comply with the terms and conditions of the federal award. Federal funds must also only be used for expenditures incurred during the award period. Condition – During our review of expenditures charged to the Crime Victim Assistance (VOCA) grant, we noted that management charged an expense prior to the completion of the project. The expense was allowable under the grant, but the timing of the charge did not align with when the activity occurred. Cause – The premature charge occurred due to management attempting to use the remaining grant funds for that period before they expired. Questioned Cost Amount – Based on deviations noted in our testwork the projected likely questioned costs resulting in noncompliance are as follows: Crime Victim Assistance (VOCA), 16.575: $74,661. Effect – The Organization was not in compliance with the requirements listed above. Recommendation – We recommend the Organization review and reinforce policies regarding timing of cost obligations and expenditures and ensure expenses are recorded in alignment with when the related activity occurs. View of Responsible Officials – Management agrees with the finding. Corrective Action Plan – See attached corrective action plan from management.
Criteria – According to 2 CFR § 200.403, 2 CFR § 200.405, and 2 CFR § 200.405, costs charged to federal awards must be allowable, reasonable, and allocable. Specifically, costs must be necessary and reasonable for the performance of the federal award, must conform to limitations and exclusions set forth in the cost principles, must be consistent with policies that apply uniformly to both federally financed and other activities, and costs must comply with the terms and conditions of the federal award. Federal funds must also only be used for expenditures incurred during the award period. Condition – During our review of expenditures charged to the Crime Victim Assistance (VOCA) grant, we noted that management charged an expense prior to the completion of the project. The expense was allowable under the grant, but the timing of the charge did not align with when the activity occurred. Cause – The premature charge occurred due to management attempting to use the remaining grant funds for that period before they expired. Questioned Cost Amount – Based on deviations noted in our testwork the projected likely questioned costs resulting in noncompliance are as follows: Crime Victim Assistance (VOCA), 16.575: $74,661. Effect – The Organization was not in compliance with the requirements listed above. Recommendation – We recommend the Organization review and reinforce policies regarding timing of cost obligations and expenditures and ensure expenses are recorded in alignment with when the related activity occurs. View of Responsible Officials – Management agrees with the finding. Corrective Action Plan – See attached corrective action plan from management.
Criteria – According to 2 CFR § 200.403, 2 CFR § 200.405, and 2 CFR § 200.405, costs charged to federal awards must be allowable, reasonable, and allocable. Specifically, costs must be necessary and reasonable for the performance of the federal award, must conform to limitations and exclusions set forth in the cost principles, must be consistent with policies that apply uniformly to both federally financed and other activities, and costs must comply with the terms and conditions of the federal award. Federal funds must also only be used for expenditures incurred during the award period. Condition – During our review of expenditures charged to the Crime Victim Assistance (VOCA) grant, we noted that management charged an expense prior to the completion of the project. The expense was allowable under the grant, but the timing of the charge did not align with when the activity occurred. Cause – The premature charge occurred due to management attempting to use the remaining grant funds for that period before they expired. Questioned Cost Amount – Based on deviations noted in our testwork the projected likely questioned costs resulting in noncompliance are as follows: Crime Victim Assistance (VOCA), 16.575: $74,661. Effect – The Organization was not in compliance with the requirements listed above. Recommendation – We recommend the Organization review and reinforce policies regarding timing of cost obligations and expenditures and ensure expenses are recorded in alignment with when the related activity occurs. View of Responsible Officials – Management agrees with the finding. Corrective Action Plan – See attached corrective action plan from management.
Criteria – According to 2 CFR § 200.403, 2 CFR § 200.405, and 2 CFR § 200.405, costs charged to federal awards must be allowable, reasonable, and allocable. Specifically, costs must be necessary and reasonable for the performance of the federal award, must conform to limitations and exclusions set forth in the cost principles, must be consistent with policies that apply uniformly to both federally financed and other activities, and costs must comply with the terms and conditions of the federal award. Federal funds must also only be used for expenditures incurred during the award period. Condition – During our review of expenditures charged to the Crime Victim Assistance (VOCA) grant, we noted that management charged an expense prior to the completion of the project. The expense was allowable under the grant, but the timing of the charge did not align with when the activity occurred. Cause – The premature charge occurred due to management attempting to use the remaining grant funds for that period before they expired. Questioned Cost Amount – Based on deviations noted in our testwork the projected likely questioned costs resulting in noncompliance are as follows: Crime Victim Assistance (VOCA), 16.575: $74,661. Effect – The Organization was not in compliance with the requirements listed above. Recommendation – We recommend the Organization review and reinforce policies regarding timing of cost obligations and expenditures and ensure expenses are recorded in alignment with when the related activity occurs. View of Responsible Officials – Management agrees with the finding. Corrective Action Plan – See attached corrective action plan from management.
2 CFR § 200.405 (a) states, in part, that a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. Ohio Admin. Code § 5101:9-1-04(C)(3) defines “Social service (SS) administrative costs” as “costs that benefit one or more SS programs. The SS cost pool consists of costs relating to the administration of various SS programs. During our testing of indirect payroll expenditures, we noted that the Belmont County Family and Children First Council Coordinator’s salary and benefits were improperly charged to the social services cost pool. This error resulted in questioned costs of $68,016 against the Temporary Assistance for Needy Families (TANF) Cluster. Failure to charge these costs to the appropriate cost pool resulted in the allocation of costs to a non-benefitting program, which subsequently resulted in improper Federal reimbursement to this non-benefitting program. We recommend the County implement procedures to evaluate expenditures to determine which programs they benefit in order to charge the associated costs to the appropriate indirect cost pool or direct program. We further recommend the County complete the necessary adjustment in CFIS Web to adjust the aforementioned costs, and any similar ones, to the benefitting program.
Finding 2024-001 - Significant Deficiency - Direct Cost Allocation Criteria: In accordance with 2 CFR 200.405(d), if a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. Condition: The Organization improperly allocated certain direct costs to its grant awards during the fiscal year ended December 31, 2024. Cause: The Organizations allocation calculation for certain direct costs did not properly allocate these costs across the projects that were benefitted. Effect: Expenses charged to projects were under-allocated in comparison to the actual time and effort spent on those projects. Recommendation: We recommend that management review their current allocation methods to ensure the expense attibutable to each project is being calculated and recorded correctly.
Identification of the federal program: Federal grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.048 Program name: Special Programs for the Aging, Title IV, and Title II, Discretionary Projects Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.403 costs must be allowable; 2 CFR 200.405 allocable; and indirect costs must follow 2 CFR 200.414 and Appendix IV to Part 200 (nonprofit rate determination). Entities without a current negotiated rate may elect the 10% de minimis rate (2 CFR 200.414(f)). HHS adopts these requirements at 45 CFR Part 75. Condition: The organization applied and included an expired provisional indirect cost rate in its HHS grant application and budgets. HHS approved the application and budgets; however, the rate in use was not current and the Organization had no active negotiated indirect cost rate agreement (NICRA). Cause: Lapse in monitoring and renewing the negotiated indirect cost rate. Effect or potential effect: Risk of noncompliance with cost principles and potential unallowable indirect cost recoveries if the expired rate differs from an approved current rate. Questioned costs: Undetermined. The variance between the expired rate and an allowable rate was not calculated. Recommendation: Either (1) obtain an updated NICRA from the cognizant agency (HHS) and apply it prospectively and, if required, retroactively. Implement controls to track rate expirations and require documented verification of the current rate before budget submissions and draw requests. Views of responsible officials: Management occurs with the recommendation. See Management’s Corrective Action Plan.
Finding 2024-004: Cost Allocation Methodology Condition: As a result of audit procedures, it was determined that Wisconsin Women's Business Initiative Corporation's cost allocation methodology was not properly updated based on a recent time study or other means to verify the accuracy of the allocations. For some awards, the de minimis rate was used but it was not applied consistently to all programs, where a method of direct allocation was done based on a prior time study conducted in 2020. Criteria: Per 2 CFR §200.405(d), if a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. Cause: Wisconsin Women's Business Initiative Corporation continued to use a legacy cost allocation model without periodic review or revision. There was no formal process to evaluate whether the methodology remained appropriate given changes in program structure, staffing, or funding sources. Effect: As a result of the financial reporting matter identified in the condition paragraph, a significant deficiency exists in Wisconsin Women's Business Initiative Corporation's internal controls over financial reporting. Recommendation: We recommend Wisconsin Women's Business Initiative Corporation conduct a comprehensive review of its cost allocation methodology, update policies to reflect current program operations and federal requirements. Wisconsin Women's Business Initiative Corporation should also implement controls to ensure allocations are based on actual benefit and supported by documentation and provide staff training on time-and-effort reporting and allocation principles. View of responsible officials: Management agrees with the finding and has developed a written corrective action plan. This finding represents a significant deficiency in internal controls over compliance and a non-material non-compliance with the reporting requirement for the major federal programs. Questioned Costs: None Major Programs: AL #14.218 Community Development Block Grant Cluster, Award Numbers CDBG FY 2024, FD 003 2023, CD5075180249, CDBG MKE RLF, CDBG Racine 2023-2024, CDBG FY 2023, B-23-UC-55-0003, ED 24020, 2024-2025 CDBG - Classic; AL #59.046 Microloan Program, Award Numbers SBAOCAML230534, SBAOCAML2024001568
Compliance Requirement Allowable Costs and Allowable Activities Type of Finding Material Weakness in Internal Control over Compliance, Material Noncompliance Program Port Security Grant Program ALN # 97.056 Federal Agency Department of Homeland Security – Direct Award Federal Award Year 2021 and 2023 Grant Numbers EMW-2021-PU-00030- IJ#3 EMW-2023-PU-00164- IJ#4 Questioned Costs $209,855 Criteria - Federal rules require that grant funds be spent only on allowable and necessary costs that are directly related to the purpose of the award. For the Port Security Grant Program (PSGP), this means expenditures must match the projects described in the approved Investment Justification (IJ). In addition, all costs must be incurred within the official grant period; expenses made before or after the authorized performance dates are not permitted. Uniform Guidance establishes clear requirements for allowability of costs under federal awards: • 2 CFR 200.403 – Costs must be necessary, reasonable, allocable, and consistently treated in accordance with the terms and conditions of the federal award. • 2 CFR 200.405 – Costs must be directly allocable to the federal award in proportion to the benefits received. • 2 CFR 200.403(c) and 200.404 – Costs must conform to limitations or exclusions set forth in the award documents and applicable federal regulations. • 2 CFR 200.309 – A non-federal entity may charge to the federal award only allowable costs incurred during the period of performance, unless specifically authorized otherwise.Condition - Testing of 50 invoices identified significant noncompliance. Fourteen (14) invoices represented expenditures that were not aligned with the approved Investment Justification (IJ), indicating that funds were used for purposes outside the scope of the grant award. In addition, one (1) invoice reflected costs incurred prior to the authorized period of performance, in direct violation of federal grant requirements. a) Expenditures were charged to the 2021 PSGP for the purchase of camera equipment, installation, and project management activities that lacked support within the approved Investment Justification No. 3 MSOC Security Sustainment Costs, resulting in questioned costs of $78,910. b) Expenditures were charged to the 2023 PSGP for the purchase of computer equipment, conference room enhancements, and biological and cultural survey that lacked support within the approved Investment Justification No. 3 GIS Acquisition and Implementation, resulting in questioned costs of $115,044 c) Expenditures were charged to the 2023 PSGP for the purchase of executive leadership training and datto backups that lacked support within the approved Investment Justification No. 4 Sustainment for Cybersecurity Network and IT Systems, resulting in questioned costs of $15,901Cause - The District failed to implement and enforce adequate internal controls to ensure that expenditures were reviewed and validated against both the approved Investment Justification and the grant’s period of performance prior to authorization. This lack of oversight reflects a breakdown in management’s responsibility for compliance with federal grant requirements. Effect - Because the District did not ensure expenditures were properly reviewed against the approved Investment Justifications and the authorized period of performance, a total of $209,855 in questioned costs was identified. These unallowable expenditures increase the risk that federal grantor agencies may require repayment or disallowance of costs, and indicate material noncompliance with federal grant requirements. The lack of adequate review and oversight also undermines accountability for federal funds, creating heightened risk of waste, abuse, and additional future noncompliance. Recommendation - The District must implement and enforce formal review procedures requiring all PSGP expenditures to be cross-checked against the approved Investment Justification (IJ) and verified for compliance with the grant’s period of performance prior to payment. No disbursement of federal funds should occur until documentation demonstrates that the expenditure directly aligns with the approved grant scope and timing. The District must consult with FEMA regarding the allowability of identified questioned costs.
#2024-005 – Major Federal Award Finding – Allocation of Costs Nature of Finding: Compliance Finding Allowable Costs and Material Weakness in Internal Controls over Compliance Criteria/Condition: Federal regulations 2 CFR 200.405 provide that costs benefiting two or more projects in proportions that can be easily determined must be allocated to the projects based on the proportional benefit. If proportions cannot be easily determined, the costs may be allocated to the benefitted projects on a reasonable and documented basis. Questioned Costs: Not able to be determined. Identification of How Questioned Costs Were Computed: Of the non-payroll major program expenditures selected for testing, certain costs charged to the major program did not have proper support for the allocation percentages that were utilized, or they were missing documented approval for the allocation percentages. Some of the allocation percentages utilized were not consistent throughout the year. These matters are not isolated or contained to any particular type of expenditure. There was no meaningful methodology identified to quantify or extend the errors to the population. Cause/Context: Controls were not in place to evaluate the allocation of costs to grants based on proportional benefit provided to each grant. For 11 of the 40 non-payroll expenditures selected for testing, allocation percentages were not properly supported or were missing documented approval. Effect: Expenditures that involve an allocation of costs between grants are not properly supported. The lack of controls results in questioned costs as a disproportionate amount of expenditures may be charged to the federal program. Recommendation: We recommend management establish procedures and controls to allocate costs between grants based upon actual costs attributed to the grant and the particular expenditure allowed by the grant. Any such allocations should be supported by activity-level substantiation and be reviewed. Documentation of the allocation methodology, review and approval should be maintained. Views of Responsible Officials and Planned Corrective Actions Percentages used for allocations will be reviewed annually across all grants/programs and updated during the budget process. These allocations will be reviewed by the CFO.
#2024-005 – Major Federal Award Finding – Allocation of Costs Nature of Finding: Compliance Finding Allowable Costs and Material Weakness in Internal Controls over Compliance Criteria/Condition: Federal regulations 2 CFR 200.405 provide that costs benefiting two or more projects in proportions that can be easily determined must be allocated to the projects based on the proportional benefit. If proportions cannot be easily determined, the costs may be allocated to the benefitted projects on a reasonable and documented basis. Questioned Costs: Not able to be determined. Identification of How Questioned Costs Were Computed: Of the non-payroll major program expenditures selected for testing, certain costs charged to the major program did not have proper support for the allocation percentages that were utilized, or they were missing documented approval for the allocation percentages. Some of the allocation percentages utilized were not consistent throughout the year. These matters are not isolated or contained to any particular type of expenditure. There was no meaningful methodology identified to quantify or extend the errors to the population. Cause/Context: Controls were not in place to evaluate the allocation of costs to grants based on proportional benefit provided to each grant. For 11 of the 40 non-payroll expenditures selected for testing, allocation percentages were not properly supported or were missing documented approval. Effect: Expenditures that involve an allocation of costs between grants are not properly supported. The lack of controls results in questioned costs as a disproportionate amount of expenditures may be charged to the federal program. Recommendation: We recommend management establish procedures and controls to allocate costs between grants based upon actual costs attributed to the grant and the particular expenditure allowed by the grant. Any such allocations should be supported by activity-level substantiation and be reviewed. Documentation of the allocation methodology, review and approval should be maintained. Views of Responsible Officials and Planned Corrective Actions Percentages used for allocations will be reviewed annually across all grants/programs and updated during the budget process. These allocations will be reviewed by the CFO.
#2024-005 – Major Federal Award Finding – Allocation of Costs Nature of Finding: Compliance Finding Allowable Costs and Material Weakness in Internal Controls over Compliance Criteria/Condition: Federal regulations 2 CFR 200.405 provide that costs benefiting two or more projects in proportions that can be easily determined must be allocated to the projects based on the proportional benefit. If proportions cannot be easily determined, the costs may be allocated to the benefitted projects on a reasonable and documented basis. Questioned Costs: Not able to be determined. Identification of How Questioned Costs Were Computed: Of the non-payroll major program expenditures selected for testing, certain costs charged to the major program did not have proper support for the allocation percentages that were utilized, or they were missing documented approval for the allocation percentages. Some of the allocation percentages utilized were not consistent throughout the year. These matters are not isolated or contained to any particular type of expenditure. There was no meaningful methodology identified to quantify or extend the errors to the population. Cause/Context: Controls were not in place to evaluate the allocation of costs to grants based on proportional benefit provided to each grant. For 11 of the 40 non-payroll expenditures selected for testing, allocation percentages were not properly supported or were missing documented approval. Effect: Expenditures that involve an allocation of costs between grants are not properly supported. The lack of controls results in questioned costs as a disproportionate amount of expenditures may be charged to the federal program. Recommendation: We recommend management establish procedures and controls to allocate costs between grants based upon actual costs attributed to the grant and the particular expenditure allowed by the grant. Any such allocations should be supported by activity-level substantiation and be reviewed. Documentation of the allocation methodology, review and approval should be maintained. Views of Responsible Officials and Planned Corrective Actions Percentages used for allocations will be reviewed annually across all grants/programs and updated during the budget process. These allocations will be reviewed by the CFO.
#2024-005 – Major Federal Award Finding – Allocation of Costs Nature of Finding: Compliance Finding Allowable Costs and Material Weakness in Internal Controls over Compliance Criteria/Condition: Federal regulations 2 CFR 200.405 provide that costs benefiting two or more projects in proportions that can be easily determined must be allocated to the projects based on the proportional benefit. If proportions cannot be easily determined, the costs may be allocated to the benefitted projects on a reasonable and documented basis. Questioned Costs: Not able to be determined. Identification of How Questioned Costs Were Computed: Of the non-payroll major program expenditures selected for testing, certain costs charged to the major program did not have proper support for the allocation percentages that were utilized, or they were missing documented approval for the allocation percentages. Some of the allocation percentages utilized were not consistent throughout the year. These matters are not isolated or contained to any particular type of expenditure. There was no meaningful methodology identified to quantify or extend the errors to the population. Cause/Context: Controls were not in place to evaluate the allocation of costs to grants based on proportional benefit provided to each grant. For 11 of the 40 non-payroll expenditures selected for testing, allocation percentages were not properly supported or were missing documented approval. Effect: Expenditures that involve an allocation of costs between grants are not properly supported. The lack of controls results in questioned costs as a disproportionate amount of expenditures may be charged to the federal program. Recommendation: We recommend management establish procedures and controls to allocate costs between grants based upon actual costs attributed to the grant and the particular expenditure allowed by the grant. Any such allocations should be supported by activity-level substantiation and be reviewed. Documentation of the allocation methodology, review and approval should be maintained. Views of Responsible Officials and Planned Corrective Actions Percentages used for allocations will be reviewed annually across all grants/programs and updated during the budget process. These allocations will be reviewed by the CFO.
#2024-005 – Major Federal Award Finding – Allocation of Costs Nature of Finding: Compliance Finding Allowable Costs and Material Weakness in Internal Controls over Compliance Criteria/Condition: Federal regulations 2 CFR 200.405 provide that costs benefiting two or more projects in proportions that can be easily determined must be allocated to the projects based on the proportional benefit. If proportions cannot be easily determined, the costs may be allocated to the benefitted projects on a reasonable and documented basis. Questioned Costs: Not able to be determined. Identification of How Questioned Costs Were Computed: Of the non-payroll major program expenditures selected for testing, certain costs charged to the major program did not have proper support for the allocation percentages that were utilized, or they were missing documented approval for the allocation percentages. Some of the allocation percentages utilized were not consistent throughout the year. These matters are not isolated or contained to any particular type of expenditure. There was no meaningful methodology identified to quantify or extend the errors to the population. Cause/Context: Controls were not in place to evaluate the allocation of costs to grants based on proportional benefit provided to each grant. For 11 of the 40 non-payroll expenditures selected for testing, allocation percentages were not properly supported or were missing documented approval. Effect: Expenditures that involve an allocation of costs between grants are not properly supported. The lack of controls results in questioned costs as a disproportionate amount of expenditures may be charged to the federal program. Recommendation: We recommend management establish procedures and controls to allocate costs between grants based upon actual costs attributed to the grant and the particular expenditure allowed by the grant. Any such allocations should be supported by activity-level substantiation and be reviewed. Documentation of the allocation methodology, review and approval should be maintained. Views of Responsible Officials and Planned Corrective Actions Percentages used for allocations will be reviewed annually across all grants/programs and updated during the budget process. These allocations will be reviewed by the CFO.
Criteria: In accordance with 2 CFR 200.405(a), costs must be allocable to the Federal award in proportion to the benefits received. A cost is allocable to a Federal award if it is incurred specifically for the award, benefits both the award and other work, and can be distributed in proportions that may be approximated using reasonable methods. Condition: During the fiscal year under audit, the auditee hosted two events at the same hotel—one charged to a nonfederal program and the other related to a Federal program. Initially, all event-related costs were charged to the nonfederal program. Subsequently, $28,500 was reclassified to the Federal program. However, only $14,500 of this amount was applicable to the Federal program. As a result, $14,000 was incorrectly charged to the Federal award. Additional review identified further errors in related reclassifications, with total known questioned costs of $18,387. Cause: The auditee did not implement sufficient review controls over cost allocations and reclassifications between programs, resulting in misallocation of shared event costs. Effect: A total of $18,387 in known questioned costs was charged to the Federal program inappropriately. Based on a sample of 40 transactions and one error totaling $14,000. One of 40 sampled transactions contained this error, which represents 2.5% of the sample population. This misallocation could lead to disallowed costs and potential recovery actions by the granting agency. Repeat finding: This is not a repeat finding. Questioned costs: $18,387 Recommendation: We recommend that the Organization implement stronger internal controls over the expenditure process to ensure that all costs charged to the program are allowable under 2 CFR 200.403, provide training to staff on the requirements for allowable costs and importance of proper oversight and conduct regular reviews of expenses charged to the programs to identify and correct any unallowable costs promptly.
Finding 2024-003: Unsubstantiated Expense Program Name: Rail and Transit Security Grant Program Assistance Listing No. 97.075 Federal Award No.: EMW-2021-RA-00048 Federal Agency: U.S. Department of Homeland Security Criteria The code of federal regulations – 2 CFR 200.405 Allocable costs requires that: A cost is allocable to a Federal award or other cost objective if the cost is assignable to that Federal award or other cost objective in accordance with the relative benefits received. This standard is met if the cost satisfies any of the following criteria: (1) Is incurred specifically for the Federal award; (2) Benefits both the Federal award and other work of the recipient or subrecipient and can be distributed in proportions that may be approximated using reasonable methods; or (3) Is necessary to the overall operation of the recipient or subrecipient and is assignable in part to the Federal award in accordance with these cost principles. The code of federal regulations – 2 CFR 200.1 Definitions defines Questioned costs as: Questioned cost means an amount, expended or received from a Federal award, that in the auditor’s judgment: (i) Is noncompliant or suspected noncompliant with Federal statutes, regulations, or the terms and conditions of the Federal award; The following exceptions to the criteria were observed during the performance of the audit procedures: 1. As part of our procedures relating to the testing requirement of Sections A and B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles), we identified a transaction erroneously included in the expenditure population that did not represent an expenditure allocable to Assistance Listing #97.075 incurred by Amtrak. The $24,200 amount included on the SEFA and in the underlying population related to a project funded by the Assistance Listing #20.315. Cause Amtrak’s control procedures in place as it relates to the review of manual journal entries related to reclassification of expenses between different projects under different funding sources were not operating effectively. The review process failed to identify the correct project to allocate the reclassification journal entry to. Effect Amtrak is in non-compliance with the related grant agreement. Questioned Costs This finding resulted in a total of $24,200 of questioned costs for Assistance Listing #97.075 – Rail and Transit Security Grant Program for Federal Award # EMW-2021-RA-00048. Context We selected 40 AB expenditure transactions, related to Assistance Listing #97.075, for internal control and compliance testing. One exception as described in the Condition section above was noted for matters 1-3 in the Criteria section above, indicating that internal controls were not functioning. Identification as a Repeat Finding Not a repeat finding. Recommendation We recommend that management strengthen the process to identify and review funding sources of underlying expenditures, that support the amounts of the reclassification journal entries. This could include reviewing approved budgets for the federal award in scope at a necessary level of detail to determine appropriateness of allocations in a timely manner. Views of Responsible Officials The invoice identified in this finding was initially charged to the incorrect project code, due to a manual process that was done incorrectly. The charges on the invoice should have been recorded to Amtrak’s annual grant, not the Rail and Transit Security Grant. The Company has moved the charges to the correct project code. The review and approval controls within the procurement process would have normally prevented the assignment of the incorrect project code, but in this situation, the project code was not set up at the time the services were rendered and an incorrect project code was used. This created the requirement for a manual journal entry to reclassify the expenses and at that time the incorrect code was selected. Amtrak will reinforce the need for proper project set up in advance and proper review of project charges once incurred.
Finding 2024-003: Unsupported Payroll Charges and Improper Drawdown of Federal Funds Compliance Requirements: Allowable Costs/Cost Principles; Cash Management; Reporting Type: Material Weakness in Internal Control over Compliance and Material Noncompliance Federal Agency: U.S. Department of Health and Human Services (Centers for Disease Control and Prevention) AL Numbers and Titles: 93.809 – National Organizations for Chronic Disease Prevention and Health Promotion Federal Award Number: NU58DP007562 Questioned Costs: $423,094 Repeat Finding: No Criteria: In accordance with 2 CFR §200.403 and §200.405, costs charged to a federal award must be necessary, reasonable, and allocable, and must conform to the terms and conditions of the award. Per 2 CFR §200.430(i), charges for salaries and wages must be supported by records that accurately reflect the work performed and be supported by a system of internal control. Furthermore, 2 CFR §200.305(b) requires that non-federal entities minimize the time between federal fund drawdown and disbursement, and limits advances to amounts needed for the immediate cash requirements of the program. Condition: During our testing of payroll-related transactions charged to the 93.809 federal program, we identified a significant reallocation of personnel costs from unrestricted funds to the federal grant that occurred late in the audit period. These charges related to multiple employees whose compensation was not included in the originally approved budget for the federal program. At the time of our testing, no formal budget revision had been submitted to the awarding agency, and the names of these staff had not been recorded in the federal grant reporting system as required by the award terms. Additionally, the auditee was unable to provide any documentation, such as certifications, labor distribution reports, calendars, or other records, to support that these employees worked on activities allocable to the federal program. We further noted that the auditee drew down federal funds prior to the recording of these payroll charges, at a time when the costs in question had neither been incurred nor documented. This resulted in federal funds being drawn in advance of need, contrary to federal cash management requirements. Cause: The auditee did not have adequate internal controls to ensure that only appropriately budgeted and documented payroll costs were charged to the federal award. In addition, the organization lacked procedures to confirm that federal funds were drawn only for costs that were allowable, incurred, and supported at the time of drawdown. These weaknesses allowed significant payroll reallocations to be processed retroactively without timely budget amendments or sufficient documentation of allocability. Effect: As a result of these control deficiencies, a total of $423,094 in personnel-related costs, including direct salaries, fringe benefits, and associated indirect costs, was charged to the federal program without appropriate budget authorization or time and effort support. These unsupported costs were also used as the basis for a drawdown of federal funds that occurred before the expenditures were recorded or substantiated. This resulted in noncompliance with both cost principles and cash management requirements and exposes the auditee to potential disallowance or repayment of federal funds. Recommendation: We recommend that the auditee enhance internal controls related to grant budgeting, payroll allocations, and cash management. These controls should ensure that payroll costs charged to federal awards are included in the approved budget or are formally revised and submitted to the grantor, are supported by accurate time and effort documentation, and that federal funds are drawn only when actual, allowable costs have been incurred and documented. We further recommend that the auditee consult with the awarding agency to determine whether any retroactive budget revision or corrective action is available or whether repayment of questioned costs will be required. Views of Responsible Officials Corrective Actions: Management agrees with this finding. Please refer to the Corrective Action Plan.
U.S. Department of Health and Human Services - 93.432 Center for Independent Living 2024-005 Lack of Written Allocation Plan for Shared Costs Criteria: In accordance with 2 CFR §200.405(d), any cost allocated to a federal award must be allocable, reasonable, and based on a method that is supported and consistently applied. In addition, 2 CFR §200.403(g) requires that costs be adequately documented. A written allocation plan is essential to demonstrate that the allocation of shared costs is equitable and in compliance with Uniform Guidance. Condition: During our audit of federal award expenditures, we found that the Organization did not maintain a written cost allocation plan to support how shared costs, such as payroll, health insurance, and retirement, were distributed across programs, including federal awards. While costs were charged to various funding sources, no formal documentation existed to describe the basis or methodology for those allocations. Cause: The League relied on informal practices, but did not document or formalize the methodology in a written plan. As a result, there was no consistent or verifiable support for how shared costs were distributed. Effect: Without a written allocation plan, there is an increased risk that shared costs may be allocated inconsistently or inappropriately to federal awards, potentially resulting in noncompliance with federal costs principles and questioned costs. Questioned Costs: None noted. Recommendation: We recommend that the League develop and implement a written cost allocation plan that outlines the basis for distributing shared costs, including the allocation methodology, the types of costs involved, and the programs affected. The plan should be reviewed periodically and updated as necessary to reflect changes in funding or operations. Supporting documentation for allocations should be maintained and readily available for audit purposes. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 50.
#2024-005 – Major Federal Award Finding – Allocation of Costs Nature of Finding: Compliance Finding Allowable Costs and Material Weakness in Internal Controls over Compliance Criteria/Condition: Federal regulations 2 CFR 200.405 provide that costs benefiting two or more projects in proportions that can be easily determined must be allocated to the projects based on the proportional benefit. If proportions cannot be easily determined, the costs may be allocated to the benefitted projects on a reasonable and documented basis. Questioned Costs: Not able to be determined. Identification of How Questioned Costs Were Computed: Of the non-payroll major program expenditures selected for testing, certain costs charged to the major program did not have proper support for the allocation percentages that were utilized, or they were missing documented approval for the allocation percentages. Some of the allocation percentages utilized were not consistent throughout the year. These matters are not isolated or contained to any particular type of expenditure. There was no meaningful methodology identified to quantify or extend the errors to the population. Cause/Context: Controls were not in place to evaluate the allocation of costs to grants based on proportional benefit provided to each grant. For 11 of the 40 non-payroll expenditures selected for testing, allocation percentages were not properly supported or were missing documented approval. Effect: Expenditures that involve an allocation of costs between grants are not properly supported. The lack of controls results in questioned costs as a disproportionate amount of expenditures may be charged to the federal program. Recommendation: We recommend management establish procedures and controls to allocate costs between grants based upon actual costs attributed to the grant and the particular expenditure allowed by the grant. Any such allocations should be supported by activity-level substantiation and be reviewed. Documentation of the allocation methodology, review and approval should be maintained. Views of Responsible Officials and Planned Corrective Actions Percentages used for allocations will be reviewed annually across all grants/programs and updated during the budget process. These allocations will be reviewed by the CFO.
#2024-005 – Major Federal Award Finding – Allocation of Costs Nature of Finding: Compliance Finding Allowable Costs and Material Weakness in Internal Controls over Compliance Criteria/Condition: Federal regulations 2 CFR 200.405 provide that costs benefiting two or more projects in proportions that can be easily determined must be allocated to the projects based on the proportional benefit. If proportions cannot be easily determined, the costs may be allocated to the benefitted projects on a reasonable and documented basis. Questioned Costs: Not able to be determined. Identification of How Questioned Costs Were Computed: Of the non-payroll major program expenditures selected for testing, certain costs charged to the major program did not have proper support for the allocation percentages that were utilized, or they were missing documented approval for the allocation percentages. Some of the allocation percentages utilized were not consistent throughout the year. These matters are not isolated or contained to any particular type of expenditure. There was no meaningful methodology identified to quantify or extend the errors to the population. Cause/Context: Controls were not in place to evaluate the allocation of costs to grants based on proportional benefit provided to each grant. For 11 of the 40 non-payroll expenditures selected for testing, allocation percentages were not properly supported or were missing documented approval. Effect: Expenditures that involve an allocation of costs between grants are not properly supported. The lack of controls results in questioned costs as a disproportionate amount of expenditures may be charged to the federal program. Recommendation: We recommend management establish procedures and controls to allocate costs between grants based upon actual costs attributed to the grant and the particular expenditure allowed by the grant. Any such allocations should be supported by activity-level substantiation and be reviewed. Documentation of the allocation methodology, review and approval should be maintained. Views of Responsible Officials and Planned Corrective Actions Percentages used for allocations will be reviewed annually across all grants/programs and updated during the budget process. These allocations will be reviewed by the CFO.
#2024-005 – Major Federal Award Finding – Allocation of Costs Nature of Finding: Compliance Finding Allowable Costs and Material Weakness in Internal Controls over Compliance Criteria/Condition: Federal regulations 2 CFR 200.405 provide that costs benefiting two or more projects in proportions that can be easily determined must be allocated to the projects based on the proportional benefit. If proportions cannot be easily determined, the costs may be allocated to the benefitted projects on a reasonable and documented basis. Questioned Costs: Not able to be determined. Identification of How Questioned Costs Were Computed: Of the non-payroll major program expenditures selected for testing, certain costs charged to the major program did not have proper support for the allocation percentages that were utilized, or they were missing documented approval for the allocation percentages. Some of the allocation percentages utilized were not consistent throughout the year. These matters are not isolated or contained to any particular type of expenditure. There was no meaningful methodology identified to quantify or extend the errors to the population. Cause/Context: Controls were not in place to evaluate the allocation of costs to grants based on proportional benefit provided to each grant. For 11 of the 40 non-payroll expenditures selected for testing, allocation percentages were not properly supported or were missing documented approval. Effect: Expenditures that involve an allocation of costs between grants are not properly supported. The lack of controls results in questioned costs as a disproportionate amount of expenditures may be charged to the federal program. Recommendation: We recommend management establish procedures and controls to allocate costs between grants based upon actual costs attributed to the grant and the particular expenditure allowed by the grant. Any such allocations should be supported by activity-level substantiation and be reviewed. Documentation of the allocation methodology, review and approval should be maintained. Views of Responsible Officials and Planned Corrective Actions Percentages used for allocations will be reviewed annually across all grants/programs and updated during the budget process. These allocations will be reviewed by the CFO.
#2024-005 – Major Federal Award Finding – Allocation of Costs Nature of Finding: Compliance Finding Allowable Costs and Material Weakness in Internal Controls over Compliance Criteria/Condition: Federal regulations 2 CFR 200.405 provide that costs benefiting two or more projects in proportions that can be easily determined must be allocated to the projects based on the proportional benefit. If proportions cannot be easily determined, the costs may be allocated to the benefitted projects on a reasonable and documented basis. Questioned Costs: Not able to be determined. Identification of How Questioned Costs Were Computed: Of the non-payroll major program expenditures selected for testing, certain costs charged to the major program did not have proper support for the allocation percentages that were utilized, or they were missing documented approval for the allocation percentages. Some of the allocation percentages utilized were not consistent throughout the year. These matters are not isolated or contained to any particular type of expenditure. There was no meaningful methodology identified to quantify or extend the errors to the population. Cause/Context: Controls were not in place to evaluate the allocation of costs to grants based on proportional benefit provided to each grant. For 11 of the 40 non-payroll expenditures selected for testing, allocation percentages were not properly supported or were missing documented approval. Effect: Expenditures that involve an allocation of costs between grants are not properly supported. The lack of controls results in questioned costs as a disproportionate amount of expenditures may be charged to the federal program. Recommendation: We recommend management establish procedures and controls to allocate costs between grants based upon actual costs attributed to the grant and the particular expenditure allowed by the grant. Any such allocations should be supported by activity-level substantiation and be reviewed. Documentation of the allocation methodology, review and approval should be maintained. Views of Responsible Officials and Planned Corrective Actions Percentages used for allocations will be reviewed annually across all grants/programs and updated during the budget process. These allocations will be reviewed by the CFO.
#2024-005 – Major Federal Award Finding – Allocation of Costs Nature of Finding: Compliance Finding Allowable Costs and Material Weakness in Internal Controls over Compliance Criteria/Condition: Federal regulations 2 CFR 200.405 provide that costs benefiting two or more projects in proportions that can be easily determined must be allocated to the projects based on the proportional benefit. If proportions cannot be easily determined, the costs may be allocated to the benefitted projects on a reasonable and documented basis. Questioned Costs: Not able to be determined. Identification of How Questioned Costs Were Computed: Of the non-payroll major program expenditures selected for testing, certain costs charged to the major program did not have proper support for the allocation percentages that were utilized, or they were missing documented approval for the allocation percentages. Some of the allocation percentages utilized were not consistent throughout the year. These matters are not isolated or contained to any particular type of expenditure. There was no meaningful methodology identified to quantify or extend the errors to the population. Cause/Context: Controls were not in place to evaluate the allocation of costs to grants based on proportional benefit provided to each grant. For 11 of the 40 non-payroll expenditures selected for testing, allocation percentages were not properly supported or were missing documented approval. Effect: Expenditures that involve an allocation of costs between grants are not properly supported. The lack of controls results in questioned costs as a disproportionate amount of expenditures may be charged to the federal program. Recommendation: We recommend management establish procedures and controls to allocate costs between grants based upon actual costs attributed to the grant and the particular expenditure allowed by the grant. Any such allocations should be supported by activity-level substantiation and be reviewed. Documentation of the allocation methodology, review and approval should be maintained. Views of Responsible Officials and Planned Corrective Actions Percentages used for allocations will be reviewed annually across all grants/programs and updated during the budget process. These allocations will be reviewed by the CFO.
Criteria: In accordance with 2 CFR 200.405(a), costs must be allocable to the Federal award in proportion to the benefits received. A cost is allocable to a Federal award if it is incurred specifically for the award, benefits both the award and other work, and can be distributed in proportions that may be approximated using reasonable methods. Condition: During the fiscal year under audit, the auditee hosted two events at the same hotel—one charged to a nonfederal program and the other related to a Federal program. Initially, all event-related costs were charged to the nonfederal program. Subsequently, $28,500 was reclassified to the Federal program. However, only $14,500 of this amount was applicable to the Federal program. As a result, $14,000 was incorrectly charged to the Federal award. Additional review identified further errors in related reclassifications, with total known questioned costs of $18,387. Cause: The auditee did not implement sufficient review controls over cost allocations and reclassifications between programs, resulting in misallocation of shared event costs. Effect: A total of $18,387 in known questioned costs was charged to the Federal program inappropriately. Based on a sample of 40 transactions and one error totaling $14,000. One of 40 sampled transactions contained this error, which represents 2.5% of the sample population. This misallocation could lead to disallowed costs and potential recovery actions by the granting agency. Repeat finding: This is not a repeat finding. Questioned costs: $18,387 Recommendation: We recommend that the Organization implement stronger internal controls over the expenditure process to ensure that all costs charged to the program are allowable under 2 CFR 200.403, provide training to staff on the requirements for allowable costs and importance of proper oversight and conduct regular reviews of expenses charged to the programs to identify and correct any unallowable costs promptly.
Finding 2024-003: Unsubstantiated Expense Program Name: Rail and Transit Security Grant Program Assistance Listing No. 97.075 Federal Award No.: EMW-2021-RA-00048 Federal Agency: U.S. Department of Homeland Security Criteria The code of federal regulations – 2 CFR 200.405 Allocable costs requires that: A cost is allocable to a Federal award or other cost objective if the cost is assignable to that Federal award or other cost objective in accordance with the relative benefits received. This standard is met if the cost satisfies any of the following criteria: (1) Is incurred specifically for the Federal award; (2) Benefits both the Federal award and other work of the recipient or subrecipient and can be distributed in proportions that may be approximated using reasonable methods; or (3) Is necessary to the overall operation of the recipient or subrecipient and is assignable in part to the Federal award in accordance with these cost principles. The code of federal regulations – 2 CFR 200.1 Definitions defines Questioned costs as: Questioned cost means an amount, expended or received from a Federal award, that in the auditor’s judgment: (i) Is noncompliant or suspected noncompliant with Federal statutes, regulations, or the terms and conditions of the Federal award; The following exceptions to the criteria were observed during the performance of the audit procedures: 1. As part of our procedures relating to the testing requirement of Sections A and B (Activities Allowed or Unallowed and Allowable Costs/Cost Principles), we identified a transaction erroneously included in the expenditure population that did not represent an expenditure allocable to Assistance Listing #97.075 incurred by Amtrak. The $24,200 amount included on the SEFA and in the underlying population related to a project funded by the Assistance Listing #20.315. Cause Amtrak’s control procedures in place as it relates to the review of manual journal entries related to reclassification of expenses between different projects under different funding sources were not operating effectively. The review process failed to identify the correct project to allocate the reclassification journal entry to. Effect Amtrak is in non-compliance with the related grant agreement. Questioned Costs This finding resulted in a total of $24,200 of questioned costs for Assistance Listing #97.075 – Rail and Transit Security Grant Program for Federal Award # EMW-2021-RA-00048. Context We selected 40 AB expenditure transactions, related to Assistance Listing #97.075, for internal control and compliance testing. One exception as described in the Condition section above was noted for matters 1-3 in the Criteria section above, indicating that internal controls were not functioning. Identification as a Repeat Finding Not a repeat finding. Recommendation We recommend that management strengthen the process to identify and review funding sources of underlying expenditures, that support the amounts of the reclassification journal entries. This could include reviewing approved budgets for the federal award in scope at a necessary level of detail to determine appropriateness of allocations in a timely manner. Views of Responsible Officials The invoice identified in this finding was initially charged to the incorrect project code, due to a manual process that was done incorrectly. The charges on the invoice should have been recorded to Amtrak’s annual grant, not the Rail and Transit Security Grant. The Company has moved the charges to the correct project code. The review and approval controls within the procurement process would have normally prevented the assignment of the incorrect project code, but in this situation, the project code was not set up at the time the services were rendered and an incorrect project code was used. This created the requirement for a manual journal entry to reclassify the expenses and at that time the incorrect code was selected. Amtrak will reinforce the need for proper project set up in advance and proper review of project charges once incurred.
Finding 2024-003: Unsupported Payroll Charges and Improper Drawdown of Federal Funds Compliance Requirements: Allowable Costs/Cost Principles; Cash Management; Reporting Type: Material Weakness in Internal Control over Compliance and Material Noncompliance Federal Agency: U.S. Department of Health and Human Services (Centers for Disease Control and Prevention) AL Numbers and Titles: 93.809 – National Organizations for Chronic Disease Prevention and Health Promotion Federal Award Number: NU58DP007562 Questioned Costs: $423,094 Repeat Finding: No Criteria: In accordance with 2 CFR §200.403 and §200.405, costs charged to a federal award must be necessary, reasonable, and allocable, and must conform to the terms and conditions of the award. Per 2 CFR §200.430(i), charges for salaries and wages must be supported by records that accurately reflect the work performed and be supported by a system of internal control. Furthermore, 2 CFR §200.305(b) requires that non-federal entities minimize the time between federal fund drawdown and disbursement, and limits advances to amounts needed for the immediate cash requirements of the program. Condition: During our testing of payroll-related transactions charged to the 93.809 federal program, we identified a significant reallocation of personnel costs from unrestricted funds to the federal grant that occurred late in the audit period. These charges related to multiple employees whose compensation was not included in the originally approved budget for the federal program. At the time of our testing, no formal budget revision had been submitted to the awarding agency, and the names of these staff had not been recorded in the federal grant reporting system as required by the award terms. Additionally, the auditee was unable to provide any documentation, such as certifications, labor distribution reports, calendars, or other records, to support that these employees worked on activities allocable to the federal program. We further noted that the auditee drew down federal funds prior to the recording of these payroll charges, at a time when the costs in question had neither been incurred nor documented. This resulted in federal funds being drawn in advance of need, contrary to federal cash management requirements. Cause: The auditee did not have adequate internal controls to ensure that only appropriately budgeted and documented payroll costs were charged to the federal award. In addition, the organization lacked procedures to confirm that federal funds were drawn only for costs that were allowable, incurred, and supported at the time of drawdown. These weaknesses allowed significant payroll reallocations to be processed retroactively without timely budget amendments or sufficient documentation of allocability. Effect: As a result of these control deficiencies, a total of $423,094 in personnel-related costs, including direct salaries, fringe benefits, and associated indirect costs, was charged to the federal program without appropriate budget authorization or time and effort support. These unsupported costs were also used as the basis for a drawdown of federal funds that occurred before the expenditures were recorded or substantiated. This resulted in noncompliance with both cost principles and cash management requirements and exposes the auditee to potential disallowance or repayment of federal funds. Recommendation: We recommend that the auditee enhance internal controls related to grant budgeting, payroll allocations, and cash management. These controls should ensure that payroll costs charged to federal awards are included in the approved budget or are formally revised and submitted to the grantor, are supported by accurate time and effort documentation, and that federal funds are drawn only when actual, allowable costs have been incurred and documented. We further recommend that the auditee consult with the awarding agency to determine whether any retroactive budget revision or corrective action is available or whether repayment of questioned costs will be required. Views of Responsible Officials Corrective Actions: Management agrees with this finding. Please refer to the Corrective Action Plan.
U.S. Department of Health and Human Services - 93.432 Center for Independent Living 2024-005 Lack of Written Allocation Plan for Shared Costs Criteria: In accordance with 2 CFR §200.405(d), any cost allocated to a federal award must be allocable, reasonable, and based on a method that is supported and consistently applied. In addition, 2 CFR §200.403(g) requires that costs be adequately documented. A written allocation plan is essential to demonstrate that the allocation of shared costs is equitable and in compliance with Uniform Guidance. Condition: During our audit of federal award expenditures, we found that the Organization did not maintain a written cost allocation plan to support how shared costs, such as payroll, health insurance, and retirement, were distributed across programs, including federal awards. While costs were charged to various funding sources, no formal documentation existed to describe the basis or methodology for those allocations. Cause: The League relied on informal practices, but did not document or formalize the methodology in a written plan. As a result, there was no consistent or verifiable support for how shared costs were distributed. Effect: Without a written allocation plan, there is an increased risk that shared costs may be allocated inconsistently or inappropriately to federal awards, potentially resulting in noncompliance with federal costs principles and questioned costs. Questioned Costs: None noted. Recommendation: We recommend that the League develop and implement a written cost allocation plan that outlines the basis for distributing shared costs, including the allocation methodology, the types of costs involved, and the programs affected. The plan should be reviewed periodically and updated as necessary to reflect changes in funding or operations. Supporting documentation for allocations should be maintained and readily available for audit purposes. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan on page 50.
2024-009: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Information on Federal Program: United States Department of the Treasury. Federal Assistance Listing Number 21.027 – Coronavirus State and Local Fiscal Recovery Funds. Compliance Requirements: Allowable Costs/Cost Principles Criteria: Per 2 CFR § 200.403(g), costs must be adequately documented. Under 2 CFR § 200.403(a) and § 200.405(a), only costs that are necessary, reasonable, and allocable to the federal program may be charged. Condition: The County overpaid the vendor by $25,170. The full amount of the invoice, including the overpayment, was charged to the federal award. The overpayment was not identified during the normal processing and payment of the invoice. Cause: The overpayment was due to an oversight during invoice processing. Effect: Federal funds were used to pay an amount not allocable to the program, resulting in $25,170 of unallowable costs charged to the federal award. Questioned Costs: $25,170 in Coronavirus State and Local Fiscal Recovery Funds. Context: We randomly selected tested fifteen (15) expenditures charged to the SLFRF program in the amount of $1,241,980 from a population of $1,292,822 and found one (1) instance of noncompliance totaling $25,170. Recommendation: We recommend that the entity seek reimbursement for the $25,170 overpayment and make appropriate adjustments to the Schedule of Expenditures of Federal Awards (SEFA) and the accounting records, as needed. Management should ensure final payment amounts are fully supported by invoice documentation. Views of Responsible Officials and Planned Corrective Actions: We agree with the findings and recommendations. This was an isolated incident whereas the payment amount was mistakenly pulled from the wrong line on a contractor’s pay application. This overpayment was missed in the subject fiscal year as the program was still active. Once the overpayment was identified, the county sought reimbursement from the vendor for the overpayment and has since received the funds. The reimbursement will be included as program revenues in the next audit report. The County will reconcile contract values as each pay application is processed in lieu of awaiting program/project closeout in the future.