2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “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.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “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.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “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.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “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.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “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.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “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.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “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.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “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.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
Finding 2022-001: Significant Deficiency – Allowable Costs/Cost Principles Repeat Finding: 2021-001 Organization did not implement an established and accurate cost allocation plan during the fiscal year ending June 30, 2022. Therefore, not all costs were shared among different grants consistently and accurately. Criteria: Under the U.S. Code of Federal Regulations (CFR), Title 2: Grants and Agreements, PART 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart E - Cost Principles Sec. 200.405 Allocable Costs - the cost must be allocated to the grants/projects based on the proportional benefit. If a cost benefits two or more grants/projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on a reasonable documented basis. Condition: During our prior year audit as well as during a monitoring visit by PDE, it was discovered that certain expenses were allocated to grants on an unsupported basis. Based on testing of expenditures performed for current year an accurate cost allocation plan was not accurately developed or implemented during the fiscal year ended June 30, 2022. Questioned Costs: None Cause: The Organization did not create or implement an accurate cost allocation plan during the current or prior or fiscal year. Effect: DCLC is not in compliance with 2 CFR Sec. 200.405 - Allocable Costs. Recommendation: We recommend that DCLC work to develop and implement a written allocation plan including calculations for all direct and indirect costs that benefit two or more grants or programs. Specifically, DCLC should review actual expenses on an ongoing basis and make any necessary adjustments to the allocated expenses.
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Federal Agencies: Department of Justice; Department of the TreasuryProgram Titles: Crime Victim Assistance; Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 16.575; 21.027Award Numbers: 22-31219-018, 22-31310-140, 22-31219-019, F19-31219-553, 8152, DA-239Award Periods: VariousCriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles.Condition/Context for EvaluationDuring our audit we identified that a total of 19 of 142 transactions (79 non-payroll transactions and 63 for payrolltransactions) tested for allowable costs and activities did not meet the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsSubpart E - Cost Principles. Below is a disaggregation of the exceptions identified:- Thirteen of the non-payroll transactions tested did not have documentation available to support the allocationof the expense to the program in accordance with 2 CFR 200.405.- Three of the non-payroll transactions tested did not meet the reasonable and necessary criteria of 2 CFR200.403.- Two of the payroll transactions tested was charged to the federal award based upon allocations determinedbefore services were performed with no process to identify significant changes in the corresponding workactivity in accordance with 2 CFR 200.430(i).- Two of the transactions tested did not have adequate documentation to support the item of cost in accordancewith the criteria at 200.403(g).- One of the transactions tested the cost incurred represented a reimbursement for costs in excess of theallowable amount per the Organization?s policies and procedures and did not meet the criteria of 2 CFR 200.403.Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged costs to the federal awards that were unallowable. Questioned CostsActual questioned costs identified during the audit totaled the amounts below by award:Assistance Pass-Through KnownListing Pass-Through Award QuestionedNumber Funder Number Costs21.027 State of Oregon Department of Administrative Services 8152 $ 1921027 King County Regional Homelessness Authority DA-239 $ 3,808CauseInternal controls were not operating effectively to ensure only allowable costs were charged to the federal awards.Repeat FindingNot applicable.RecommendationWe recommend that the Organization provide additional training to employees to ensure that controls operate effectivelyso that only allowable costs are authorized to be charged to federal awards and that record retention controls arestrengthened to ensure documentation and policies are retained to support the distribution of charges between projects.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Federal Agencies: Department of Justice; Department of the TreasuryProgram Titles: Crime Victim Assistance; Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 16.575; 21.027Award Numbers: 22-31219-018, 22-31310-140, 22-31219-019, F19-31219-553, 8152, DA-239Award Periods: VariousCriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles.Condition/Context for EvaluationDuring our audit we identified that a total of 19 of 142 transactions (79 non-payroll transactions and 63 for payrolltransactions) tested for allowable costs and activities did not meet the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsSubpart E - Cost Principles. Below is a disaggregation of the exceptions identified:- Thirteen of the non-payroll transactions tested did not have documentation available to support the allocationof the expense to the program in accordance with 2 CFR 200.405.- Three of the non-payroll transactions tested did not meet the reasonable and necessary criteria of 2 CFR200.403.- Two of the payroll transactions tested was charged to the federal award based upon allocations determinedbefore services were performed with no process to identify significant changes in the corresponding workactivity in accordance with 2 CFR 200.430(i).- Two of the transactions tested did not have adequate documentation to support the item of cost in accordancewith the criteria at 200.403(g).- One of the transactions tested the cost incurred represented a reimbursement for costs in excess of theallowable amount per the Organization?s policies and procedures and did not meet the criteria of 2 CFR 200.403.Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged costs to the federal awards that were unallowable. Questioned CostsActual questioned costs identified during the audit totaled the amounts below by award:Assistance Pass-Through KnownListing Pass-Through Award QuestionedNumber Funder Number Costs21.027 State of Oregon Department of Administrative Services 8152 $ 1921027 King County Regional Homelessness Authority DA-239 $ 3,808CauseInternal controls were not operating effectively to ensure only allowable costs were charged to the federal awards.Repeat FindingNot applicable.RecommendationWe recommend that the Organization provide additional training to employees to ensure that controls operate effectivelyso that only allowable costs are authorized to be charged to federal awards and that record retention controls arestrengthened to ensure documentation and policies are retained to support the distribution of charges between projects.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Federal Agencies: Department of Justice; Department of the TreasuryProgram Titles: Crime Victim Assistance; Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 16.575; 21.027Award Numbers: 22-31219-018, 22-31310-140, 22-31219-019, F19-31219-553, 8152, DA-239Award Periods: VariousCriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles.Condition/Context for EvaluationDuring our audit we identified that a total of 19 of 142 transactions (79 non-payroll transactions and 63 for payrolltransactions) tested for allowable costs and activities did not meet the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsSubpart E - Cost Principles. Below is a disaggregation of the exceptions identified:- Thirteen of the non-payroll transactions tested did not have documentation available to support the allocationof the expense to the program in accordance with 2 CFR 200.405.- Three of the non-payroll transactions tested did not meet the reasonable and necessary criteria of 2 CFR200.403.- Two of the payroll transactions tested was charged to the federal award based upon allocations determinedbefore services were performed with no process to identify significant changes in the corresponding workactivity in accordance with 2 CFR 200.430(i).- Two of the transactions tested did not have adequate documentation to support the item of cost in accordancewith the criteria at 200.403(g).- One of the transactions tested the cost incurred represented a reimbursement for costs in excess of theallowable amount per the Organization?s policies and procedures and did not meet the criteria of 2 CFR 200.403.Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged costs to the federal awards that were unallowable. Questioned CostsActual questioned costs identified during the audit totaled the amounts below by award:Assistance Pass-Through KnownListing Pass-Through Award QuestionedNumber Funder Number Costs21.027 State of Oregon Department of Administrative Services 8152 $ 1921027 King County Regional Homelessness Authority DA-239 $ 3,808CauseInternal controls were not operating effectively to ensure only allowable costs were charged to the federal awards.Repeat FindingNot applicable.RecommendationWe recommend that the Organization provide additional training to employees to ensure that controls operate effectivelyso that only allowable costs are authorized to be charged to federal awards and that record retention controls arestrengthened to ensure documentation and policies are retained to support the distribution of charges between projects.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Federal Agencies: Department of Justice; Department of the TreasuryProgram Titles: Crime Victim Assistance; Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 16.575; 21.027Award Numbers: 22-31219-018, 22-31310-140, 22-31219-019, F19-31219-553, 8152, DA-239Award Periods: VariousCriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles.Condition/Context for EvaluationDuring our audit we identified that a total of 19 of 142 transactions (79 non-payroll transactions and 63 for payrolltransactions) tested for allowable costs and activities did not meet the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsSubpart E - Cost Principles. Below is a disaggregation of the exceptions identified:- Thirteen of the non-payroll transactions tested did not have documentation available to support the allocationof the expense to the program in accordance with 2 CFR 200.405.- Three of the non-payroll transactions tested did not meet the reasonable and necessary criteria of 2 CFR200.403.- Two of the payroll transactions tested was charged to the federal award based upon allocations determinedbefore services were performed with no process to identify significant changes in the corresponding workactivity in accordance with 2 CFR 200.430(i).- Two of the transactions tested did not have adequate documentation to support the item of cost in accordancewith the criteria at 200.403(g).- One of the transactions tested the cost incurred represented a reimbursement for costs in excess of theallowable amount per the Organization?s policies and procedures and did not meet the criteria of 2 CFR 200.403.Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged costs to the federal awards that were unallowable. Questioned CostsActual questioned costs identified during the audit totaled the amounts below by award:Assistance Pass-Through KnownListing Pass-Through Award QuestionedNumber Funder Number Costs21.027 State of Oregon Department of Administrative Services 8152 $ 1921027 King County Regional Homelessness Authority DA-239 $ 3,808CauseInternal controls were not operating effectively to ensure only allowable costs were charged to the federal awards.Repeat FindingNot applicable.RecommendationWe recommend that the Organization provide additional training to employees to ensure that controls operate effectivelyso that only allowable costs are authorized to be charged to federal awards and that record retention controls arestrengthened to ensure documentation and policies are retained to support the distribution of charges between projects.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Federal Agencies: Department of Justice; Department of the TreasuryProgram Titles: Crime Victim Assistance; Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 16.575; 21.027Award Numbers: 22-31219-018, 22-31310-140, 22-31219-019, F19-31219-553, 8152, DA-239Award Periods: VariousCriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles.Condition/Context for EvaluationDuring our audit we identified that a total of 19 of 142 transactions (79 non-payroll transactions and 63 for payrolltransactions) tested for allowable costs and activities did not meet the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsSubpart E - Cost Principles. Below is a disaggregation of the exceptions identified:- Thirteen of the non-payroll transactions tested did not have documentation available to support the allocationof the expense to the program in accordance with 2 CFR 200.405.- Three of the non-payroll transactions tested did not meet the reasonable and necessary criteria of 2 CFR200.403.- Two of the payroll transactions tested was charged to the federal award based upon allocations determinedbefore services were performed with no process to identify significant changes in the corresponding workactivity in accordance with 2 CFR 200.430(i).- Two of the transactions tested did not have adequate documentation to support the item of cost in accordancewith the criteria at 200.403(g).- One of the transactions tested the cost incurred represented a reimbursement for costs in excess of theallowable amount per the Organization?s policies and procedures and did not meet the criteria of 2 CFR 200.403.Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged costs to the federal awards that were unallowable. Questioned CostsActual questioned costs identified during the audit totaled the amounts below by award:Assistance Pass-Through KnownListing Pass-Through Award QuestionedNumber Funder Number Costs21.027 State of Oregon Department of Administrative Services 8152 $ 1921027 King County Regional Homelessness Authority DA-239 $ 3,808CauseInternal controls were not operating effectively to ensure only allowable costs were charged to the federal awards.Repeat FindingNot applicable.RecommendationWe recommend that the Organization provide additional training to employees to ensure that controls operate effectivelyso that only allowable costs are authorized to be charged to federal awards and that record retention controls arestrengthened to ensure documentation and policies are retained to support the distribution of charges between projects.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Federal Agencies: Department of Justice; Department of the TreasuryProgram Titles: Crime Victim Assistance; Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 16.575; 21.027Award Numbers: 22-31219-018, 22-31310-140, 22-31219-019, F19-31219-553, 8152, DA-239Award Periods: VariousCriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles.Condition/Context for EvaluationDuring our audit we identified that a total of 19 of 142 transactions (79 non-payroll transactions and 63 for payrolltransactions) tested for allowable costs and activities did not meet the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsSubpart E - Cost Principles. Below is a disaggregation of the exceptions identified:- Thirteen of the non-payroll transactions tested did not have documentation available to support the allocationof the expense to the program in accordance with 2 CFR 200.405.- Three of the non-payroll transactions tested did not meet the reasonable and necessary criteria of 2 CFR200.403.- Two of the payroll transactions tested was charged to the federal award based upon allocations determinedbefore services were performed with no process to identify significant changes in the corresponding workactivity in accordance with 2 CFR 200.430(i).- Two of the transactions tested did not have adequate documentation to support the item of cost in accordancewith the criteria at 200.403(g).- One of the transactions tested the cost incurred represented a reimbursement for costs in excess of theallowable amount per the Organization?s policies and procedures and did not meet the criteria of 2 CFR 200.403.Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged costs to the federal awards that were unallowable. Questioned CostsActual questioned costs identified during the audit totaled the amounts below by award:Assistance Pass-Through KnownListing Pass-Through Award QuestionedNumber Funder Number Costs21.027 State of Oregon Department of Administrative Services 8152 $ 1921027 King County Regional Homelessness Authority DA-239 $ 3,808CauseInternal controls were not operating effectively to ensure only allowable costs were charged to the federal awards.Repeat FindingNot applicable.RecommendationWe recommend that the Organization provide additional training to employees to ensure that controls operate effectivelyso that only allowable costs are authorized to be charged to federal awards and that record retention controls arestrengthened to ensure documentation and policies are retained to support the distribution of charges between projects.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must 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 follow 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must 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 follow 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must 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 follow 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must 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 follow 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must 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 follow 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must 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 follow 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Condition: We selected a sample of payroll cost allocations and tested whether the employees’ time were allocated in accordance with Day One’s cost allocations by program. As a result of our test, we noted that one employee’s hours were did not match the allocation guidelines provided by the Organization and hours were improperly charged to the Substance Abuse Prevention and Control program. Criteria: § 200.405 Allocable costs. (a) 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. This standard is met if the cost: (1) Is incurred specifically for the Federal award; (2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and (3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart.Cause: The Organization has not implemented policies and procedures requiring management review the accuracy of the costs allocations to each program prior to being recording in the accounting records. Questioned Costs: $1,282.83 Effect and Context: By improperly allocating payroll costs to the Substance Abuse Prevention and Control-CPS program, the amount of costs reported for this program are overstated at June 30, 2022. Recommendation: We also recommend management review allocation percentages and application of allocations prior to recording the costs in the accounting records. Management’s Response and Corrective Action Plan: See management’s responses documented on page 46-47.
Education Stabilization Funds Information on Federal Program: U.S Department of Education CRRSA Act (Governor?s Emergency Education Relief Fund and Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D and 84.425C), and American Rescue Plan (Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425U) passed through the New York State Education Department. Criteria: CFR Section 200.405 stipulates 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. Statement of Condition: During our review of expenditures charged to the program, it was noted that certain expenditures were charged to the individual grants within the program incorrectly, were not charged in accordance with the individual grant budgets, or were not eligible expenditures of the grants. Statement of Cause: The District did not have appropriate internal controls over compliance to review expenditures claimed under each grant within the program in accordance with 2 CFR Section 200.405. Statement of Effect: The District is not in compliance with 2 CFR Section 200.405. The District does not have an adequate review of expenditures charged to the major program, as a result, unallowable costs could be charged to the program. Questioned Cost: $22,992 ? see perspective information. Recommendation: We recommend that the District implement procedures to review expenditures claimed under the program, and within each grant under the program, are allowable, charged to the correct grant, and are not already claimed. Views of the Responsible Officials and Planned Corrective Actions: The District agrees that procedures should be implemented to review expenditures claimed under each program within each grant is allowable, charged to the appropriate grant, and is not already claimed. Perspective Information: As part of testing of compliance over allowable costs, a selection of expenditures charged to the major program was selected for testing of compliance. The amount noted as questioned costs was included based on costs of $22,992 charged to the major program that were general expenditures of the District and should not have been charged to the major program. An adjustment was made to correct the errors.
Education Stabilization Funds Information on Federal Program: U.S Department of Education CRRSA Act (Governor?s Emergency Education Relief Fund and Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D and 84.425C), and American Rescue Plan (Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425U) passed through the New York State Education Department. Criteria: CFR Section 200.405 stipulates 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. Statement of Condition: During our review of expenditures charged to the program, it was noted that certain expenditures were charged to the individual grants within the program incorrectly, were not charged in accordance with the individual grant budgets, or were not eligible expenditures of the grants. Statement of Cause: The District did not have appropriate internal controls over compliance to review expenditures claimed under each grant within the program in accordance with 2 CFR Section 200.405. Statement of Effect: The District is not in compliance with 2 CFR Section 200.405. The District does not have an adequate review of expenditures charged to the major program, as a result, unallowable costs could be charged to the program. Questioned Cost: $22,992 ? see perspective information. Recommendation: We recommend that the District implement procedures to review expenditures claimed under the program, and within each grant under the program, are allowable, charged to the correct grant, and are not already claimed. Views of the Responsible Officials and Planned Corrective Actions: The District agrees that procedures should be implemented to review expenditures claimed under each program within each grant is allowable, charged to the appropriate grant, and is not already claimed. Perspective Information: As part of testing of compliance over allowable costs, a selection of expenditures charged to the major program was selected for testing of compliance. The amount noted as questioned costs was included based on costs of $22,992 charged to the major program that were general expenditures of the District and should not have been charged to the major program. An adjustment was made to correct the errors.
Education Stabilization Funds Information on Federal Program: U.S Department of Education CRRSA Act (Governor?s Emergency Education Relief Fund and Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D and 84.425C), and American Rescue Plan (Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425U) passed through the New York State Education Department. Criteria: CFR Section 200.405 stipulates 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. Statement of Condition: During our review of expenditures charged to the program, it was noted that certain expenditures were charged to the individual grants within the program incorrectly, were not charged in accordance with the individual grant budgets, or were not eligible expenditures of the grants. Statement of Cause: The District did not have appropriate internal controls over compliance to review expenditures claimed under each grant within the program in accordance with 2 CFR Section 200.405. Statement of Effect: The District is not in compliance with 2 CFR Section 200.405. The District does not have an adequate review of expenditures charged to the major program, as a result, unallowable costs could be charged to the program. Questioned Cost: $22,992 ? see perspective information. Recommendation: We recommend that the District implement procedures to review expenditures claimed under the program, and within each grant under the program, are allowable, charged to the correct grant, and are not already claimed. Views of the Responsible Officials and Planned Corrective Actions: The District agrees that procedures should be implemented to review expenditures claimed under each program within each grant is allowable, charged to the appropriate grant, and is not already claimed. Perspective Information: As part of testing of compliance over allowable costs, a selection of expenditures charged to the major program was selected for testing of compliance. The amount noted as questioned costs was included based on costs of $22,992 charged to the major program that were general expenditures of the District and should not have been charged to the major program. An adjustment was made to correct the errors.
Education Stabilization Funds Information on Federal Program: U.S Department of Education CRRSA Act (Governor?s Emergency Education Relief Fund and Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D and 84.425C), and American Rescue Plan (Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425U) passed through the New York State Education Department. Criteria: CFR Section 200.405 stipulates 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. Statement of Condition: During our review of expenditures charged to the program, it was noted that certain expenditures were charged to the individual grants within the program incorrectly, were not charged in accordance with the individual grant budgets, or were not eligible expenditures of the grants. Statement of Cause: The District did not have appropriate internal controls over compliance to review expenditures claimed under each grant within the program in accordance with 2 CFR Section 200.405. Statement of Effect: The District is not in compliance with 2 CFR Section 200.405. The District does not have an adequate review of expenditures charged to the major program, as a result, unallowable costs could be charged to the program. Questioned Cost: $22,992 ? see perspective information. Recommendation: We recommend that the District implement procedures to review expenditures claimed under the program, and within each grant under the program, are allowable, charged to the correct grant, and are not already claimed. Views of the Responsible Officials and Planned Corrective Actions: The District agrees that procedures should be implemented to review expenditures claimed under each program within each grant is allowable, charged to the appropriate grant, and is not already claimed. Perspective Information: As part of testing of compliance over allowable costs, a selection of expenditures charged to the major program was selected for testing of compliance. The amount noted as questioned costs was included based on costs of $22,992 charged to the major program that were general expenditures of the District and should not have been charged to the major program. An adjustment was made to correct the errors.
Education Stabilization Funds Information on Federal Program: U.S Department of Education CRRSA Act (Governor?s Emergency Education Relief Fund and Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D and 84.425C), and American Rescue Plan (Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425U) passed through the New York State Education Department. Criteria: CFR Section 200.405 stipulates 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. Statement of Condition: During our review of expenditures charged to the program, it was noted that certain expenditures were charged to the individual grants within the program incorrectly, were not charged in accordance with the individual grant budgets, or were not eligible expenditures of the grants. Statement of Cause: The District did not have appropriate internal controls over compliance to review expenditures claimed under each grant within the program in accordance with 2 CFR Section 200.405. Statement of Effect: The District is not in compliance with 2 CFR Section 200.405. The District does not have an adequate review of expenditures charged to the major program, as a result, unallowable costs could be charged to the program. Questioned Cost: $22,992 ? see perspective information. Recommendation: We recommend that the District implement procedures to review expenditures claimed under the program, and within each grant under the program, are allowable, charged to the correct grant, and are not already claimed. Views of the Responsible Officials and Planned Corrective Actions: The District agrees that procedures should be implemented to review expenditures claimed under each program within each grant is allowable, charged to the appropriate grant, and is not already claimed. Perspective Information: As part of testing of compliance over allowable costs, a selection of expenditures charged to the major program was selected for testing of compliance. The amount noted as questioned costs was included based on costs of $22,992 charged to the major program that were general expenditures of the District and should not have been charged to the major program. An adjustment was made to correct the errors.
Education Stabilization Funds Information on Federal Program: U.S Department of Education CRRSA Act (Governor?s Emergency Education Relief Fund and Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D and 84.425C), and American Rescue Plan (Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425U) passed through the New York State Education Department. Criteria: CFR Section 200.405 stipulates 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. Statement of Condition: During our review of expenditures charged to the program, it was noted that certain expenditures were charged to the individual grants within the program incorrectly, were not charged in accordance with the individual grant budgets, or were not eligible expenditures of the grants. Statement of Cause: The District did not have appropriate internal controls over compliance to review expenditures claimed under each grant within the program in accordance with 2 CFR Section 200.405. Statement of Effect: The District is not in compliance with 2 CFR Section 200.405. The District does not have an adequate review of expenditures charged to the major program, as a result, unallowable costs could be charged to the program. Questioned Cost: $22,992 ? see perspective information. Recommendation: We recommend that the District implement procedures to review expenditures claimed under the program, and within each grant under the program, are allowable, charged to the correct grant, and are not already claimed. Views of the Responsible Officials and Planned Corrective Actions: The District agrees that procedures should be implemented to review expenditures claimed under each program within each grant is allowable, charged to the appropriate grant, and is not already claimed. Perspective Information: As part of testing of compliance over allowable costs, a selection of expenditures charged to the major program was selected for testing of compliance. The amount noted as questioned costs was included based on costs of $22,992 charged to the major program that were general expenditures of the District and should not have been charged to the major program. An adjustment was made to correct the errors.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 WIOA Cluster Federal Award Identification Number and Year - AY 21 WIOA Local Administration Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.405(d) indicates that costs that benefit two or more projects or activities must be allocated to projects based on the proportional benefit. Condition - During the year, DESC incurred expenditures to hire a consultant to assist with the search for a chief financial officer. The full cost was charged to the WIOA cluster. Since the chief financial officer position benefits the entire organization, it should have been proportionately allocated to all programs. Questioned Costs - Not applicable Identification of How Questioned Costs Were Computed - Not applicable Context - Executive searches are not a commonly incurred expenditure for DESC. The amount of the expenditure was $10,000. Cause and Effect - An internal control was not in place to ensure that the chief financial officer search was proportionately allocated. When the matter was brought to management's attention during the audit, a correction was made. Recommendation - Controls should be put in place to ensure that costs that benefit multiple activities are appropriately allocated. Views of Responsible Officials and Planned Corrective Actions - DESC has replaced members and expanded the number of members on the fiscal/accounting team, including an experienced accounting manager and senior accountant, and implemented a training program to ensure all fiscal/accounting team members are aware of and understand their duties and responsibilities as related to the reconciliation of costs charged to their grants within their portfolios. DESC will implement purchase orders prior to the end of FY 2022/2023, which will include financial analysts providing cost allocations coding in advance of receiving the invoice. Additionally, training has been provided to fiscal staff on cost allocation requirements.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 WIOA Cluster Federal Award Identification Number and Year - AY 21 WIOA Local Administration Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.405(d) indicates that costs that benefit two or more projects or activities must be allocated to projects based on the proportional benefit. Condition - During the year, DESC incurred expenditures to hire a consultant to assist with the search for a chief financial officer. The full cost was charged to the WIOA cluster. Since the chief financial officer position benefits the entire organization, it should have been proportionately allocated to all programs. Questioned Costs - Not applicable Identification of How Questioned Costs Were Computed - Not applicable Context - Executive searches are not a commonly incurred expenditure for DESC. The amount of the expenditure was $10,000. Cause and Effect - An internal control was not in place to ensure that the chief financial officer search was proportionately allocated. When the matter was brought to management's attention during the audit, a correction was made. Recommendation - Controls should be put in place to ensure that costs that benefit multiple activities are appropriately allocated. Views of Responsible Officials and Planned Corrective Actions - DESC has replaced members and expanded the number of members on the fiscal/accounting team, including an experienced accounting manager and senior accountant, and implemented a training program to ensure all fiscal/accounting team members are aware of and understand their duties and responsibilities as related to the reconciliation of costs charged to their grants within their portfolios. DESC will implement purchase orders prior to the end of FY 2022/2023, which will include financial analysts providing cost allocations coding in advance of receiving the invoice. Additionally, training has been provided to fiscal staff on cost allocation requirements.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 WIOA Cluster Federal Award Identification Number and Year - AY 21 WIOA Local Administration Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.405(d) indicates that costs that benefit two or more projects or activities must be allocated to projects based on the proportional benefit. Condition - During the year, DESC incurred expenditures to hire a consultant to assist with the search for a chief financial officer. The full cost was charged to the WIOA cluster. Since the chief financial officer position benefits the entire organization, it should have been proportionately allocated to all programs. Questioned Costs - Not applicable Identification of How Questioned Costs Were Computed - Not applicable Context - Executive searches are not a commonly incurred expenditure for DESC. The amount of the expenditure was $10,000. Cause and Effect - An internal control was not in place to ensure that the chief financial officer search was proportionately allocated. When the matter was brought to management's attention during the audit, a correction was made. Recommendation - Controls should be put in place to ensure that costs that benefit multiple activities are appropriately allocated. Views of Responsible Officials and Planned Corrective Actions - DESC has replaced members and expanded the number of members on the fiscal/accounting team, including an experienced accounting manager and senior accountant, and implemented a training program to ensure all fiscal/accounting team members are aware of and understand their duties and responsibilities as related to the reconciliation of costs charged to their grants within their portfolios. DESC will implement purchase orders prior to the end of FY 2022/2023, which will include financial analysts providing cost allocations coding in advance of receiving the invoice. Additionally, training has been provided to fiscal staff on cost allocation requirements.
Finding No. 2022-004 Allowable Costs/Cost Principles for Payroll Federal Program ALN 93.556 Promoting Safe and Stable Families Name of Federal Agency U.S. Department of Health and Human Services Pass-through Entity The Families and Children Administration of the Department of Family of the Commonwealth of Puerto Rico Category Significant deficiency of internal controls over compliance Criteria Section 200.405 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) indicates that a cost is allocable to a particular federal award if the goods or services involved are chargeable or assignable to that federal award or cost objective in accordance with relative benefits received. This standard is met, among other things, if the cost charged is incurred specifically for the federal award. Also, under cost principles established by 2 CFR Section 200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated and be incorporated into the official records of the non-Federal entity. Condition found For the period that covers October 1, 2021, to January 31, 2022, two employees approved time and attendance reports did not agree with what was reflected within the payroll system and therefore petitioned to the federal program. Time charged to the federal program was not based on actual hours. Cause Resignation of the personnel in charge of reconciling expenses to amounts charged to expense and billed to the program and a significant delay in replacing the personnel to continue the process of reconciliation on a timely basis. Effect The amount charged to the federal program and paid to the employees exceeded compensation contracted with the employees. If the compensation costs allocated to the grant cannot be supported in accordance with the Uniform Guidance, the granting agency could determine that these costs are not allowable. Such condition may cause the federal grantor to issue warnings and/or impose penalties to the University. Questioned cost Known questioned cost amounts to $1,934. Context As part of our compliance tests with allowable costs and cost principles, we selected forty-three (43) expense transactions of the Promoting Safe and Stable Families program amounting to $760,673, of which ten (10) items amounting to $51,998 were related to payroll paid under the program. Our test disclosed two (2) instances where the employee's hours worked on the program differed from the amount charged for the period examined. Amount petitioned to the program for the period under evaluation between the two employees amounted to $16,107. The actual amount per approved time sheets amounted to $14,173, leaving a difference of $1,934 between the two employees. The payroll population for the test amounted to $930,169. The projected difference amounts to $34,596 when known questioned costs of $1,934 (3.72% of the payroll sample) are projected to total payroll and benefits expended for the program. Identification of a repeat finding This is a repeat finding from the inmediate previous audit, finding no. 2021-007. Recommendation The University's program staff and management should ensure that the amounts charged to the federal award and disbursed to the employees are accurate and under the correct contract rates. Monthly reconciliation of all expenses, including of salaries charged to program versus actual hours incurred must be timely performed. Views of responsible officials and planned corrective actions The University?s management agrees with this finding. Please refer to the corrective action plan on pages 58-61.
Finding 2022-005 Indirect Cost Allocation ? Questioned Costs Condition: Grant 102-TCC-BS-PY21, PY Business Services & Solutions, grant document did not contain a specific allowable indirect cost amount. The budget contained a line for ?Subcontractors and Other? of $66,077. The Organization charged an indirect allocation to this grant of $47,070, an overcharge of $19,007. Grant 102-TCC-CT-BS-PY21, Thurston Chamber ? Sector Training, had an indirect budget line item of $17,274. The Organization charged $24,736, an over change of $7,462. Grant 102-TCCC-PEC-PY21, Thurston Chamber Pathway to Employment Cohort, had no budget line item for indirect costs. The Organization charged indirect costs under ?Career Services? for $73,535, an overcharge of $73,535. These overcharges total questioned costs of $100,004. The Organization lacked a methodology of pooling all indirect costs and allocating the costs uniformly across all revenue sources. Cause: The Organization did not obtain adequate training and understanding of the calculation and allocation of indirect costs in government funded programs. Criteria: Uniform Guidance 2 CFR ? 200.405 Allocable costs. (a) 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. This standard is met if the cost: (1) Is incurred specifically for the Federal award; (2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and (3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart. (b) All activities which benefit from the non-Federal entity's indirect (F&A) cost, including unallowable activities and donated services by the non-Federal entity or third parties, will receive an appropriate allocation of indirect costs. (c) Any cost allocable to a particular Federal award under the principles provided for in this part may not be charged to other Federal awards to overcome fund deficiencies, to avoid SECTION 3 ? FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (continued) Finding 2022-005 Indirect Cost Allocation ? Questioned Costs restrictions imposed by Federal statutes, regulations, or terms and conditions of the Federal awards, or for other reasons. However, this prohibition would not preclude the non-Federal entity from shifting costs that are allowable under two or more Federal awards in accordance with existing Federal statutes, regulations, or the terms and conditions of the Federal awards. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Effect: The Organization charged federal programs for unallowed indirect costs. Recommendation: To ensure compliance with indirect cost calculation and allocation procedures, the Organization should obtain additional grant training. Management?s response: Management agrees with the need for additional grant training, especially as it applies to calculating and allocating indirect costs. However, we do have issues with the classification of expenses within the original contract and hope we can reconcile those prior to the finalization of the grant award. Person Responsible: President/CEO Finance Officer
Finding 2022-005 Indirect Cost Allocation ? Questioned Costs Condition: Grant 102-TCC-BS-PY21, PY Business Services & Solutions, grant document did not contain a specific allowable indirect cost amount. The budget contained a line for ?Subcontractors and Other? of $66,077. The Organization charged an indirect allocation to this grant of $47,070, an overcharge of $19,007. Grant 102-TCC-CT-BS-PY21, Thurston Chamber ? Sector Training, had an indirect budget line item of $17,274. The Organization charged $24,736, an over change of $7,462. Grant 102-TCCC-PEC-PY21, Thurston Chamber Pathway to Employment Cohort, had no budget line item for indirect costs. The Organization charged indirect costs under ?Career Services? for $73,535, an overcharge of $73,535. These overcharges total questioned costs of $100,004. The Organization lacked a methodology of pooling all indirect costs and allocating the costs uniformly across all revenue sources. Cause: The Organization did not obtain adequate training and understanding of the calculation and allocation of indirect costs in government funded programs. Criteria: Uniform Guidance 2 CFR ? 200.405 Allocable costs. (a) 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. This standard is met if the cost: (1) Is incurred specifically for the Federal award; (2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and (3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart. (b) All activities which benefit from the non-Federal entity's indirect (F&A) cost, including unallowable activities and donated services by the non-Federal entity or third parties, will receive an appropriate allocation of indirect costs. (c) Any cost allocable to a particular Federal award under the principles provided for in this part may not be charged to other Federal awards to overcome fund deficiencies, to avoid SECTION 3 ? FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (continued) Finding 2022-005 Indirect Cost Allocation ? Questioned Costs restrictions imposed by Federal statutes, regulations, or terms and conditions of the Federal awards, or for other reasons. However, this prohibition would not preclude the non-Federal entity from shifting costs that are allowable under two or more Federal awards in accordance with existing Federal statutes, regulations, or the terms and conditions of the Federal awards. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Effect: The Organization charged federal programs for unallowed indirect costs. Recommendation: To ensure compliance with indirect cost calculation and allocation procedures, the Organization should obtain additional grant training. Management?s response: Management agrees with the need for additional grant training, especially as it applies to calculating and allocating indirect costs. However, we do have issues with the classification of expenses within the original contract and hope we can reconcile those prior to the finalization of the grant award. Person Responsible: President/CEO Finance Officer
Finding 2022-005 Indirect Cost Allocation ? Questioned Costs Condition: Grant 102-TCC-BS-PY21, PY Business Services & Solutions, grant document did not contain a specific allowable indirect cost amount. The budget contained a line for ?Subcontractors and Other? of $66,077. The Organization charged an indirect allocation to this grant of $47,070, an overcharge of $19,007. Grant 102-TCC-CT-BS-PY21, Thurston Chamber ? Sector Training, had an indirect budget line item of $17,274. The Organization charged $24,736, an over change of $7,462. Grant 102-TCCC-PEC-PY21, Thurston Chamber Pathway to Employment Cohort, had no budget line item for indirect costs. The Organization charged indirect costs under ?Career Services? for $73,535, an overcharge of $73,535. These overcharges total questioned costs of $100,004. The Organization lacked a methodology of pooling all indirect costs and allocating the costs uniformly across all revenue sources. Cause: The Organization did not obtain adequate training and understanding of the calculation and allocation of indirect costs in government funded programs. Criteria: Uniform Guidance 2 CFR ? 200.405 Allocable costs. (a) 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. This standard is met if the cost: (1) Is incurred specifically for the Federal award; (2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and (3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart. (b) All activities which benefit from the non-Federal entity's indirect (F&A) cost, including unallowable activities and donated services by the non-Federal entity or third parties, will receive an appropriate allocation of indirect costs. (c) Any cost allocable to a particular Federal award under the principles provided for in this part may not be charged to other Federal awards to overcome fund deficiencies, to avoid SECTION 3 ? FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (continued) Finding 2022-005 Indirect Cost Allocation ? Questioned Costs restrictions imposed by Federal statutes, regulations, or terms and conditions of the Federal awards, or for other reasons. However, this prohibition would not preclude the non-Federal entity from shifting costs that are allowable under two or more Federal awards in accordance with existing Federal statutes, regulations, or the terms and conditions of the Federal awards. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Effect: The Organization charged federal programs for unallowed indirect costs. Recommendation: To ensure compliance with indirect cost calculation and allocation procedures, the Organization should obtain additional grant training. Management?s response: Management agrees with the need for additional grant training, especially as it applies to calculating and allocating indirect costs. However, we do have issues with the classification of expenses within the original contract and hope we can reconcile those prior to the finalization of the grant award. Person Responsible: President/CEO Finance Officer
CFDA Title and Number: 93.045 ? Aging Cluster Name of Federal Agency: U.S. Department of Health and Human Services Internal Control over Compliance: Allowable Cost/Cost Principles Criteria: 2 CFR Part 200.405 requires the following direct cost allocation principles: 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. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on any reasonable documented basis. 2 CFR Part 200.414 requires that indirect costs are supported with a cost allocation plan or an indirect cost proposal prepared in accordance with the Uniform Guidance. 2 CFR Part 200 Appendices III-VII contain the requirements for the development and submission of indirect cost rate proposals and cost allocation plans. A non-Federal entity that has never received a negotiated indirect cost rate, may elect to charge a de minimis rate of 10% of modified total direct costs. Typical examples of indirect (F&A) cost for many nonprofit organizations include depreciation on buildings and equipment, the costs of operating and maintaining facilities, and general administration and general expenses, such as the salaries and expenses of executive officers, personnel administration, and accounting. Condition: The Association uses the number of full-time equivalents (FTEs) assigned to programs and locations to generate the distribution lists to allocate the program?s direct and indirect costs. However, the distribution lists have not been updated since 2019 even though the number of FTEs by program and location had changed since 2019. Cause: The Association has not reviewed or updated the distribution lists since 2019. There is no process to review or update the distribution list periodically. Effect or Potential Effect: The outdated distribution lists may cause the allocation of direct and indirect costs to be recorded imprecisely for each program code. Questioned Cost: $15,074 (We selected 42 items to be tested out of 24,368 total items. 7 out of 42 items were noted to have exceptions. The questioned cost of $15,074 is a projected amount.) Repeat of a Prior-Year Finding: No. Recommendation: We recommend that the Association update the distribution lists regularly to record the allocations accurately, especially when there are significant personnel changes.
CFDA Title and Number: 93.045 ? Aging Cluster Name of Federal Agency: U.S. Department of Health and Human Services Internal Control over Compliance: Allowable Cost/Cost Principles Criteria: 2 CFR Part 200.405 requires the following direct cost allocation principles: 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. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on any reasonable documented basis. Condition: The Association staff made an error when processing the payroll entries for the pay date of January 26, 2022. Thus, they had to remove the batch for that period and manually post every transaction for the period of January 1 to 15, 2022. When the staff posted the entries, they did not allocate the costs to the correct program/site for the employees who worked for multiple programs, causing payroll expenditures for that period to be charged to one specific program. Cause: Manual entry error. Effect or Potential Effect: Overstatement of payroll costs charged to the Senior Nutrition Program. Questioned Cost: $25,808 (We selected 40 items to be tested out of 2,132 total items. 1 out of 40 items was noted to have exceptions. The questioned cost of $25,808 is a projected amount.) Repeat of a Prior-Year Finding: No. Recommendation: We recommend to provide employee training to improve payroll processing and avoid errors. Additionally, manual postings should be reviewed and approved by a supervisor.
CFDA Title and Number: 93.045 ? Aging Cluster Name of Federal Agency: U.S. Department of Health and Human Services Internal Control over Compliance: Allowable Cost/Cost Principles Criteria: 2 CFR Part 200.405 requires the following direct cost allocation principles: 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. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on any reasonable documented basis. Condition: The Association uses two accounting systems: NOVAtime (time clock system) and MIP (in-house accounting/payroll system) to record the payroll expenses and allocations for each program. The allocation percentages are setup differently in both accounting system. Cause: When the FSA has employee changes, the staff only adjusts the allocation percentage in NOVAtime, which cause minor discrepancies when allocating the payroll-related expenses. Effect or Potential Effect: Overstate and/or understate the program expenses. Questioned Cost: Unable to determine. Repeat of a Prior-Year Finding: No. Recommendation: We recommend that the Association update the MIP system when the staff update the NOVA time system after the personnel action form is reviewed and approved. The Association should also add the system adjustment instructions to the policies and procedures.
U.S. DEPARTMENT OF EDUCATION COVID-19 Education Stabilization Fund - Assistance Listing 84.425U passed through the Pennsylvania Department of Education; Grant Period - Year Ended June 30, 2022. Criteria: In accordance with Title 2 CFR Section 200.405(c) of the Uniform Guidance, any cost allocable to a particular federal award may not be charged to other federal awards except when shifting costs that are allowable under two or more federal awards in accordance with existing federal statutes, regulations, or the terms and conditions of federal awards. Condition: The District allocated duplicate costs to both the CRRSA Act ESSER II Fund and ARP Act ESSER III Fund programs. Cause: The District allocated costs to the programs by posting year end adjusting journal entries instead of charging costs directly to the programs as costs were incurred. As a result, costs were duplicated. Effect: Expenditure of federal awards was overstated. Questioned Costs: Known questioned costs totaled $21,229. Perspective Information: Not applicable. Identification of Repeat Findings: Not applicable. Recommendation: The District should record costs that are directly allocable to federal programs when costs are incurred to reduce the risk of duplicating costs allocated to federal awards. Views of Responsible Officials: Management agrees with the finding. Planned Corrective Action: See District?s corrective action plan.
U.S. DEPARTMENT OF EDUCATION COVID-19 Education Stabilization Fund - Assistance Listing 84.425U passed through the Pennsylvania Department of Education; Grant Period - Year Ended June 30, 2022. Criteria: In accordance with Title 2 CFR Section 200.405(c) of the Uniform Guidance, any cost allocable to a particular federal award may not be charged to other federal awards except when shifting costs that are allowable under two or more federal awards in accordance with existing federal statutes, regulations, or the terms and conditions of federal awards. Condition: The District allocated duplicate costs to both the CRRSA Act ESSER II Fund and ARP Act ESSER III Fund programs. Cause: The District allocated costs to the programs by posting year end adjusting journal entries instead of charging costs directly to the programs as costs were incurred. As a result, costs were duplicated. Effect: Expenditure of federal awards was overstated. Questioned Costs: Known questioned costs totaled $21,229. Perspective Information: Not applicable. Identification of Repeat Findings: Not applicable. Recommendation: The District should record costs that are directly allocable to federal programs when costs are incurred to reduce the risk of duplicating costs allocated to federal awards. Views of Responsible Officials: Management agrees with the finding. Planned Corrective Action: See District?s corrective action plan.
Education Stabilization Funds Information on Federal Program: U.S Department of Education CARES Act (Governor?s Emergency Education Relief Fund and Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D and 84.425C), CRRSA Act (Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D) and American Rescue Plan (Elementary and Secondary School Emergency Relief Fund and Homeless Youth and Children Assistance Listing No. 84.425U and 84.425W) passed through the New York State Education Department. Criteria: CFR Section 200.405 stipulates 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. Statement of Condition: During our review of expenditures charged to the program, it was noted that certain expenditures were charged to the individual grants within the program incorrectly, were charged not in accordance with the individual grant budgets, or were not eligible expenditures of the grants. Statement of Cause: The District did not have appropriate internal controls over compliance to review expenditures claimed under each grant within the program in accordance with 2 CFR Section 200.405. Statement of Effect: The District is not in compliance with 2 CFR Section 200.405. The District does not have an adequate review of expenditures charged to the major program, as a result, unallowable costs could be charged to the program. Questioned Cost: $185,324 ? see perspective information. Repeat Finding: Yes Recommendation: We recommend that the District implement procedures to review expenditures claimed under the program, and within each grant under the program, are allowable, charged to the correct grant, and are not already claimed. Views of the Responsible Officials and Planned Corrective Actions: Cathy Meher, the district treasurer, will review this with the responsible staff and will be more cognizant of the accounting procedures and review and ensure that accounts are accurately stated. This will begin immediately.Perspective Information: As part of testing of compliance over allowable costs, a selection of expenditures charged to the major program was selected for testing of compliance. The amount noted as questioned costs was included based on costs of $90,079 charged to the major program that were general expenditures of the District and should not have been charged to the major program. The remaining $95,155 noted as questioned costs were appropriately included in the program, but Incorrectly charged to the individual grants within the program. An adjustment was made to correct the errors.
Education Stabilization Funds Information on Federal Program: U.S Department of Education CARES Act (Governor?s Emergency Education Relief Fund and Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D and 84.425C), CRRSA Act (Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D) and American Rescue Plan (Elementary and Secondary School Emergency Relief Fund and Homeless Youth and Children Assistance Listing No. 84.425U and 84.425W) passed through the New York State Education Department. Criteria: CFR Section 200.405 stipulates 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. Statement of Condition: During our review of expenditures charged to the program, it was noted that certain expenditures were charged to the individual grants within the program incorrectly, were charged not in accordance with the individual grant budgets, or were not eligible expenditures of the grants. Statement of Cause: The District did not have appropriate internal controls over compliance to review expenditures claimed under each grant within the program in accordance with 2 CFR Section 200.405. Statement of Effect: The District is not in compliance with 2 CFR Section 200.405. The District does not have an adequate review of expenditures charged to the major program, as a result, unallowable costs could be charged to the program. Questioned Cost: $185,324 ? see perspective information. Repeat Finding: Yes Recommendation: We recommend that the District implement procedures to review expenditures claimed under the program, and within each grant under the program, are allowable, charged to the correct grant, and are not already claimed. Views of the Responsible Officials and Planned Corrective Actions: Cathy Meher, the district treasurer, will review this with the responsible staff and will be more cognizant of the accounting procedures and review and ensure that accounts are accurately stated. This will begin immediately.Perspective Information: As part of testing of compliance over allowable costs, a selection of expenditures charged to the major program was selected for testing of compliance. The amount noted as questioned costs was included based on costs of $90,079 charged to the major program that were general expenditures of the District and should not have been charged to the major program. The remaining $95,155 noted as questioned costs were appropriately included in the program, but Incorrectly charged to the individual grants within the program. An adjustment was made to correct the errors.
Education Stabilization Funds Information on Federal Program: U.S Department of Education CARES Act (Governor?s Emergency Education Relief Fund and Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D and 84.425C), CRRSA Act (Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D) and American Rescue Plan (Elementary and Secondary School Emergency Relief Fund and Homeless Youth and Children Assistance Listing No. 84.425U and 84.425W) passed through the New York State Education Department. Criteria: CFR Section 200.405 stipulates 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. Statement of Condition: During our review of expenditures charged to the program, it was noted that certain expenditures were charged to the individual grants within the program incorrectly, were charged not in accordance with the individual grant budgets, or were not eligible expenditures of the grants. Statement of Cause: The District did not have appropriate internal controls over compliance to review expenditures claimed under each grant within the program in accordance with 2 CFR Section 200.405. Statement of Effect: The District is not in compliance with 2 CFR Section 200.405. The District does not have an adequate review of expenditures charged to the major program, as a result, unallowable costs could be charged to the program. Questioned Cost: $185,324 ? see perspective information. Repeat Finding: Yes Recommendation: We recommend that the District implement procedures to review expenditures claimed under the program, and within each grant under the program, are allowable, charged to the correct grant, and are not already claimed. Views of the Responsible Officials and Planned Corrective Actions: Cathy Meher, the district treasurer, will review this with the responsible staff and will be more cognizant of the accounting procedures and review and ensure that accounts are accurately stated. This will begin immediately.Perspective Information: As part of testing of compliance over allowable costs, a selection of expenditures charged to the major program was selected for testing of compliance. The amount noted as questioned costs was included based on costs of $90,079 charged to the major program that were general expenditures of the District and should not have been charged to the major program. The remaining $95,155 noted as questioned costs were appropriately included in the program, but Incorrectly charged to the individual grants within the program. An adjustment was made to correct the errors.
Education Stabilization Funds Information on Federal Program: U.S Department of Education CARES Act (Governor?s Emergency Education Relief Fund and Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D and 84.425C), CRRSA Act (Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D) and American Rescue Plan (Elementary and Secondary School Emergency Relief Fund and Homeless Youth and Children Assistance Listing No. 84.425U and 84.425W) passed through the New York State Education Department. Criteria: CFR Section 200.405 stipulates 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. Statement of Condition: During our review of expenditures charged to the program, it was noted that certain expenditures were charged to the individual grants within the program incorrectly, were charged not in accordance with the individual grant budgets, or were not eligible expenditures of the grants. Statement of Cause: The District did not have appropriate internal controls over compliance to review expenditures claimed under each grant within the program in accordance with 2 CFR Section 200.405. Statement of Effect: The District is not in compliance with 2 CFR Section 200.405. The District does not have an adequate review of expenditures charged to the major program, as a result, unallowable costs could be charged to the program. Questioned Cost: $185,324 ? see perspective information. Repeat Finding: Yes Recommendation: We recommend that the District implement procedures to review expenditures claimed under the program, and within each grant under the program, are allowable, charged to the correct grant, and are not already claimed. Views of the Responsible Officials and Planned Corrective Actions: Cathy Meher, the district treasurer, will review this with the responsible staff and will be more cognizant of the accounting procedures and review and ensure that accounts are accurately stated. This will begin immediately.Perspective Information: As part of testing of compliance over allowable costs, a selection of expenditures charged to the major program was selected for testing of compliance. The amount noted as questioned costs was included based on costs of $90,079 charged to the major program that were general expenditures of the District and should not have been charged to the major program. The remaining $95,155 noted as questioned costs were appropriately included in the program, but Incorrectly charged to the individual grants within the program. An adjustment was made to correct the errors.
Education Stabilization Funds Information on Federal Program: U.S Department of Education CARES Act (Governor?s Emergency Education Relief Fund and Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D and 84.425C), CRRSA Act (Elementary and Secondary School Emergency Relief Fund Assistance Listing No. 84.425D) and American Rescue Plan (Elementary and Secondary School Emergency Relief Fund and Homeless Youth and Children Assistance Listing No. 84.425U and 84.425W) passed through the New York State Education Department. Criteria: CFR Section 200.405 stipulates 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. Statement of Condition: During our review of expenditures charged to the program, it was noted that certain expenditures were charged to the individual grants within the program incorrectly, were charged not in accordance with the individual grant budgets, or were not eligible expenditures of the grants. Statement of Cause: The District did not have appropriate internal controls over compliance to review expenditures claimed under each grant within the program in accordance with 2 CFR Section 200.405. Statement of Effect: The District is not in compliance with 2 CFR Section 200.405. The District does not have an adequate review of expenditures charged to the major program, as a result, unallowable costs could be charged to the program. Questioned Cost: $185,324 ? see perspective information. Repeat Finding: Yes Recommendation: We recommend that the District implement procedures to review expenditures claimed under the program, and within each grant under the program, are allowable, charged to the correct grant, and are not already claimed. Views of the Responsible Officials and Planned Corrective Actions: Cathy Meher, the district treasurer, will review this with the responsible staff and will be more cognizant of the accounting procedures and review and ensure that accounts are accurately stated. This will begin immediately.Perspective Information: As part of testing of compliance over allowable costs, a selection of expenditures charged to the major program was selected for testing of compliance. The amount noted as questioned costs was included based on costs of $90,079 charged to the major program that were general expenditures of the District and should not have been charged to the major program. The remaining $95,155 noted as questioned costs were appropriately included in the program, but Incorrectly charged to the individual grants within the program. An adjustment was made to correct the errors.
Reference Number: 2022-030 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services (Agency) Federal Program: Immunization Cooperative Agreements, COVID-19 - Immunization Cooperative Agreements Assistance Listing Number: 93.268 Award Number and Year: 19NH23IP922615 (7/1/2020 ? 6/30/2024) Compliance Requirement: Allowable Costs Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR section 200.403(a), except where otherwise authorized by statute, in order for a cost to be allowable under Federal awards it must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Per 2 CFR section 200.405, 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. This standard is met if the cost: (1) Is incurred specifically for the Federal award; (2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and (3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: 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 comply 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). Condition: The Agency included an unallowable cost in an administrative cost pool which was allocated to the program. Context: The Agency?s Department of Health (Department) charged a settlement payment of $3,891.30 related to a Superfund site lawsuit to an administrative cost pool, and a portion of this payment was allocated to the program. The allocated cost was not necessary or reasonable for the performance of the Federal award nor was it assignable in part to the Federal award as a cost necessary to the overall operation of the Department. Cause: The Agency?s internal controls were not operating sufficiently to ensure that costs charged to an administrative cost pool were allowable and allocable per the requirements of 2 CFR sections 200.403 and 200.405. Effect: Unallowable costs were allocated to the program. Questioned costs: Undetermined, due to the distribution of costs through the Department?s approved cost allocation plan. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that costs charged to administrative cost pools are allowable and allocable per 2 CFR sections 200.403 and 200.405. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-030 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services (Agency) Federal Program: Immunization Cooperative Agreements, COVID-19 - Immunization Cooperative Agreements Assistance Listing Number: 93.268 Award Number and Year: 19NH23IP922615 (7/1/2020 ? 6/30/2024) Compliance Requirement: Allowable Costs Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR section 200.403(a), except where otherwise authorized by statute, in order for a cost to be allowable under Federal awards it must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Per 2 CFR section 200.405, 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. This standard is met if the cost: (1) Is incurred specifically for the Federal award; (2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and (3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: 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 comply 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). Condition: The Agency included an unallowable cost in an administrative cost pool which was allocated to the program. Context: The Agency?s Department of Health (Department) charged a settlement payment of $3,891.30 related to a Superfund site lawsuit to an administrative cost pool, and a portion of this payment was allocated to the program. The allocated cost was not necessary or reasonable for the performance of the Federal award nor was it assignable in part to the Federal award as a cost necessary to the overall operation of the Department. Cause: The Agency?s internal controls were not operating sufficiently to ensure that costs charged to an administrative cost pool were allowable and allocable per the requirements of 2 CFR sections 200.403 and 200.405. Effect: Unallowable costs were allocated to the program. Questioned costs: Undetermined, due to the distribution of costs through the Department?s approved cost allocation plan. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that costs charged to administrative cost pools are allowable and allocable per 2 CFR sections 200.403 and 200.405. Views of responsible officials: Management agrees with the finding.
Federal Agency: U.S. Department of Education Special Education Cluster (IDEA) Federal Assistance Listing Number 84.027, Special Education ? Grants to States Federal Assistance Listing Number 84.173, Special Education ? Preschool Grants 2022-003: Activities Allowed or Unallowed (Material Weakness) Criteria: 2 CFR Section 200.405(d) states, ?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. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then, notwithstanding paragraph (c) of this section, the costs may be allocated or transferred to benefitted projects on any reasonable documented basis.? Condition: One of the eight payroll samples selected for testing had incorrect salary percentages applied to the grant when compared to the tasks completed and approved budget for the grant. Cause: The School District filed the final expenditures reports (FS-10F) well after fiscal year end. Effect or Potential Effect: The School District could be receiving federal monies that would not provide benefits to this specific program. Discrepancies were identified upon audit and are to be adjusted before final expenditure reports are filed. Recommendation: The School District should review all expenditures being charged to the respective grants to ensure expenditures are in line with amounts budgeted per the FS-10. Management?s Response: See corrective action plan. 89
Federal Agency: U.S. Department of Education Special Education Cluster (IDEA) Federal Assistance Listing Number 84.027, Special Education ? Grants to States Federal Assistance Listing Number 84.173, Special Education ? Preschool Grants 2022-003: Activities Allowed or Unallowed (Material Weakness) Criteria: 2 CFR Section 200.405(d) states, ?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. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then, notwithstanding paragraph (c) of this section, the costs may be allocated or transferred to benefitted projects on any reasonable documented basis.? Condition: One of the eight payroll samples selected for testing had incorrect salary percentages applied to the grant when compared to the tasks completed and approved budget for the grant. Cause: The School District filed the final expenditures reports (FS-10F) well after fiscal year end. Effect or Potential Effect: The School District could be receiving federal monies that would not provide benefits to this specific program. Discrepancies were identified upon audit and are to be adjusted before final expenditure reports are filed. Recommendation: The School District should review all expenditures being charged to the respective grants to ensure expenditures are in line with amounts budgeted per the FS-10. Management?s Response: See corrective action plan. 89
2022-004 Unallowable Costs Federal Agency: US Department of Health and Human Services Federal Program Name: Child Care and Development Funds Block Grant (CCDF) - CRRSA (Coronavirus Response and Relieve Supplemental Act) Assistance Listing Number: 93.575 Federal Award Identification Number and Year: 2102NMCCC5 Award Period: 12/27/2020-09/30/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR Part 200, Subpart E: 200.403 (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. 200.403 (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. 200.405 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 Condition: Out of 40 transactions tested, we identified 3 where the underlying support identified payments made to entities for teachers and staff that participate in HeadStart activities. Questioned Costs: $354,000 Context: We sampled 40 transactions. After bringing this to the Department's attention, the Grants Managers did perform a thorough assessment and accumulated all payments under this additional funding for this purpose. Cause: Program staff were allocating this additional funding to entities that have CCDF and Headstart programs. However, there was not appropriate tracking to separate the transactions and ensure they were charged to the correct federal programs. Effect: Costs associated with another federal program were charged to CCDF. Repeat Finding: No Recommendation: We recommend the program work closely with ASD to ensure expenditures are tracked and mapped to the appropriate federal award. Views of Responsible Officials: The Early Childhood Education and Care Department (ECECD) agrees with this audit finding and the ASD Director, CFO and Grants Manager will work with The Federal Program Team to develop formal policies and procedures for grant management to ensure compliance with programmatic grant requirements and track expenditures to ensure costs charged to grants are allowable, necessary, and reasonable. This will be completed by June 30, 2023.