Federal Agency: Department of Justice Federal Assistance Listing Numbers: 16.756, 16.726 Programs: Court Appointed Special Advocates, Juvenile Mentoring Program Award/Pass-Through Entity Identifying Numbers: 2018-CH-BX-K001, 15PJDP-21-GK-02762-CASA, 2019-MU-FX-0004, 2020-JU-FX-0028 Criteria: The Uniform Guidance in 2 CFR §200.332 details requirements for pass-through entities in regard to subrecipient monitoring and management. Per 2 CFR §200.332, Requirements for Pass-Through Entities: “All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the federal award and subaward. Required information includes: (1) Federal award identification. i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient’s unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of federal award date in §200.1 of this part) of award to the recipient by the federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass through entity, including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings Number and Title; the pass-through entity must identify the dollar amount made available under each federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the federal award (including if the de minimis rate is charged) per § 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the federal awarding agency, including identification of any required financial and performance reports; (4) i. An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the pass-through entity must determine the appropriate rate in collaboration with the subrecipient, which is either: (A) The negotiated indirect cost rate between the pass-through entity and the subrecipient, which can be based on a prior negotiated rate between a different PTE and the same subrecipient. If basing the rate on a previously negotiated rate, the pass-through entity is not required to collect information justifying this rate, but may elect to do so; (B) The de minimis indirect cost rate. ii. The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a federally approved rate. Subrecipients can elect to use the cost allocation method to account for indirect costs in accordance with §200.405(d). (5) A requirement that the subrecipient permits the pass-through entity and auditors to have access to the subrecipient’s records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (6) Appropriate terms and conditions concerning closeout of the subaward.” Condition: National CASA/GAL’s subrecipient agreements do not contain a level of specificity to fully comply with federal subrecipient regulations. During our testing of subrecipient monitoring, we selected 20 subrecipient awards within Court Appointed Special Advocates and 17 subrecipient awards within the Juvenile Mentoring Program. For all awards tested, National CASA/GAL’s subaward agreements did not comply with 2 CFR §200.332, Requirements for Pass-Through Entities, as they do not contain a specific scope of work or project description. Cause: National CASA/GAL did not have the proper policies and procedures in place to ensure subaward agreements complied to relevant federal regulation, and that all required elements are located in subaward agreements, and not in the application or by reference to other documents. Effect or Potential Effect: Without adequate controls in place to ensure conformity with subaward requirements, grantees may not ensure compliance with any award special conditions or revised budgets agreed upon at contract implementation. Questioned Costs: None. Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements using a non-statistically valid sample. For the Court Appointed Special Advocates Program, the population consisted of 100 subawards made totaling to $1,471,827 provided to subrecipients in 2022. The sample consisted of 20 subawards totaling $410,352 provided to subrecipients in 2022. For the Juvenile Mentoring Program, the population consisted of 83 subawards totaling to $2,339,039 provided to subrecipients in 2022. The sample consisted of 17 subawards totaling $441,399 provided to subrecipients in 2022. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend establishing and maintaining written policies and procedures to ensure subaward agreements conform to the requirements outlined in 2 CFR §200.332. Views of Responsible Officials: Management agrees that subrecipient agreements in place in 2022 did not fully comply with 2 CFR §200.332. Updates were made to the policies and procedures as well to ensure subaward files contain the requisite components. Management has additionally implemented a Grant Master File Checklist to ensure compliance with terms and conditions required in subaward agreements.
Federal Agency: Department of Justice Federal Assistance Listing Numbers: 16.756, 16.726 Programs: Court Appointed Special Advocates, Juvenile Mentoring Program Award/Pass-Through Entity Identifying Numbers: 2018-CH-BX-K001, 15PJDP-21-GK-02762-CASA, 2019-MU-FX-0004, 2020-JU-FX-0028 Criteria: The Uniform Guidance in 2 CFR §200.332 details requirements for pass-through entities in regard to subrecipient monitoring and management. Per 2 CFR §200.332, Requirements for Pass-Through Entities: “All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the federal award and subaward. Required information includes: (1) Federal award identification. i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient’s unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of federal award date in §200.1 of this part) of award to the recipient by the federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass through entity, including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings Number and Title; the pass-through entity must identify the dollar amount made available under each federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the federal award (including if the de minimis rate is charged) per § 200.414. (2) All requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the federal awarding agency, including identification of any required financial and performance reports; (4) i. An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, the pass-through entity must determine the appropriate rate in collaboration with the subrecipient, which is either: (A) The negotiated indirect cost rate between the pass-through entity and the subrecipient, which can be based on a prior negotiated rate between a different PTE and the same subrecipient. If basing the rate on a previously negotiated rate, the pass-through entity is not required to collect information justifying this rate, but may elect to do so; (B) The de minimis indirect cost rate. ii. The pass-through entity must not require use of a de minimis indirect cost rate if the subrecipient has a federally approved rate. Subrecipients can elect to use the cost allocation method to account for indirect costs in accordance with §200.405(d). (5) A requirement that the subrecipient permits the pass-through entity and auditors to have access to the subrecipient’s records and financial statements as necessary for the pass-through entity to meet the requirements of this part; and (6) Appropriate terms and conditions concerning closeout of the subaward.” Condition: National CASA/GAL’s subrecipient agreements do not contain a level of specificity to fully comply with federal subrecipient regulations. During our testing of subrecipient monitoring, we selected 20 subrecipient awards within Court Appointed Special Advocates and 17 subrecipient awards within the Juvenile Mentoring Program. For all awards tested, National CASA/GAL’s subaward agreements did not comply with 2 CFR §200.332, Requirements for Pass-Through Entities, as they do not contain a specific scope of work or project description. Cause: National CASA/GAL did not have the proper policies and procedures in place to ensure subaward agreements complied to relevant federal regulation, and that all required elements are located in subaward agreements, and not in the application or by reference to other documents. Effect or Potential Effect: Without adequate controls in place to ensure conformity with subaward requirements, grantees may not ensure compliance with any award special conditions or revised budgets agreed upon at contract implementation. Questioned Costs: None. Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements using a non-statistically valid sample. For the Court Appointed Special Advocates Program, the population consisted of 100 subawards made totaling to $1,471,827 provided to subrecipients in 2022. The sample consisted of 20 subawards totaling $410,352 provided to subrecipients in 2022. For the Juvenile Mentoring Program, the population consisted of 83 subawards totaling to $2,339,039 provided to subrecipients in 2022. The sample consisted of 17 subawards totaling $441,399 provided to subrecipients in 2022. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend establishing and maintaining written policies and procedures to ensure subaward agreements conform to the requirements outlined in 2 CFR §200.332. Views of Responsible Officials: Management agrees that subrecipient agreements in place in 2022 did not fully comply with 2 CFR §200.332. Updates were made to the policies and procedures as well to ensure subaward files contain the requisite components. Management has additionally implemented a Grant Master File Checklist to ensure compliance with terms and conditions required in subaward agreements.
Repeat of Prior Audit Finding 2021-001 Federal Program: Trans-National Crime Federal Agency: United States Department of State - United States Bureau of International Narcotics and Law Enforcement Affairs Federal Assistance Listing Number: 19.705 Federal Award Year: December 31, 2022 Criteria: 2 CFR Part 200.303(a) of the Uniform Guidance require all non-Federal entities to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. In addition, 2 CFR section 200.405 requires federal awards be expended only for allowable activities. Condition/Context: Panthera Corporation was unable to provide a signed contract, payment information, invoice or reconciliation to evidence allowability of the expenditures or documentation of review and approval for the following: • For 34 out of 80 selections, no evidence of approval of the invoice or approval of signed contract could be provided (control). • For 63 out of 80 selections, no evidence of approval of payment could be provided (control). • For 46 out of 80 selections, no evidence of signed contract or payment support could be provided (compliance). This was not a statistically valid sample. Questioned Costs: Questioned costs were approximately $65,341. Cause: Panthera Corporation did not retain/could not retrieve the signed contract or any related support for the disbursements due to poor document retention and staffing turnover and did not follow its internal control procedures by including formal, written review of disbursement payments. Effect: Panthera Corporation has not complied with the specific requirements for activities allowed or unallowed and allowable costs/cost principles as described in the Uniform Guidance. Unallowable costs may have been charged to the federal program. Recommendation: We recommend that Panthera Corporation review its process and implement procedures that would allow management to properly maintain all required documentation on its federal expenditures. Views of Responsible Officials: Management acknowledges the finding and is in the process of attaining the proper systems to adequately track and maintain documentation including the review and approval process.
Significant deficiency in internal controls over compliance and instances of noncompliance related to allowable costs. Federal Agency: Department of Health and Human Services Program Title: National Organizations of State and Local Officials CFDA Number: 93.011 Award Numbers: 1 G32HS42592-01-00 Award Period: July 31, 2021 - July 31, 2023 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart E section 2 CFR 200.405 (as codified by the Department of Health and Human Services [DHHS] in 45 CFR 75) requires direct costs be allocated based on the proportional benefit received by each award. Condition/Context for Evaluation In a population of 25 payroll costs, we noted four instances in which the amount allocated to the award was a rounded percentage instead of the true calculated percentage. This resulted in three instances of overcharge to the award and one instance of undercharge to the award. Questioned Costs $76.58. Cause Due to turnover in staff, there was no standard procedure followed for how the payroll costs should be calculated and applied to the federal award. This resulted in an overall overcharge to the award compared to what the actual allocation percentage would have charged. Effect or Potential Effect The Organization did not have sufficient internal controls in place to review allocated costs for accuracy. Repeat Finding Not applicable. Recommendation We recommend that the Organization implement internal controls over payroll costs charged to awards to ensure they are calculated and allocated in accordance with 2 CFR 200.405. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying corrective action plan.
Item: 2022-002 Assistance Listing Number: 14.231 Programs: COVID-19 - Emergency Solutions Grant ? Homeless Street Outreach Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agencies: City of Phoenix Pass-Through Grantor Identifying Number: 154962-0 Award Year: July 1, 2021 ? June 30, 2022 and July 1, 2022 ? September 30, 2022 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR ? 200.405 - Allocable costs ? 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 is incurred specifically for the Federal award, 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 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 subpart E. Condition: In fiscal year 2022, the Organization did not have an adequate process to review and approve employee cell phone costs charged to the program resulting in non-program costs being charged to the program. One employee's phone bill continued to be charged to the grant after they stopped working on the program. Questioned Costs: $1,051 Context: In a population of 75 non-payroll costs charged to the program, we conducted a non-statistical sample of 40 non-payroll costs charged to the program. In our sample of 40, we noted 4 selections included an allocation of cell phone charges for an employee who did not work on the program. Additionally, we noted 1 of the same 40 selections did not have the proper review and approval before being paid. As a result of our sampling error, we reviewed all twelve cell phone charges for this employee charged to the program during the fiscal year ended September 30, 2022 and noted that cell phone charges were improperly charged to the program for the period from November 2021 through August 2022 for a total questioned costs of $1,051. This is deemed to be a material weakness in internal control over compliance. Effect: Non-payroll costs totaling $1,051 were inappropriately charged to the federal program. Cause: Southwest Behavioral Health Services, Inc. and Subsidiaries did not have adequate controls in place to properly review and approve non-payroll expenses to ensure only costs associated with employees who worked on the program were charged to the major federal program. Identification as a Repeat Finding: Not a repeat finding Recommendation: Southwest Behavioral Health Services, Inc. and Subsidiaries should implement controls to adequately review and approve non-payroll expenses to ensure only costs associated with employees who worked on the program were charged to the major federal program. Views of Responsible Officials: Management of Southwest Behavioral Health Services concurs with the finding. See Corrective Action Plan.
Item: 2022-003 Assistance Listing Number: 14.241 Programs: Housing Opportunities for Persons with AIDS Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agencies: City of Phoenix Pass-Through Grantor Identifying Number: 144347 Award Year: July 1, 2021 ? June 30, 2022 and July 1, 2022 ? June 30, 2023 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR ? 200.405 - Allocable costs ? 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 is incurred specifically for the Federal award, 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 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 subpart E. Condition: In fiscal year 2022, the Organization did not have an adequate process to review and approve employee cell phone costs charged to the program resulting in non-program costs being charged to the program. Questioned Costs: $869 Context: In a population of over 250 non-payroll costs charged to the program, we conducted a non-statistical sample of 40 non-payroll costs charged to the program. In our sample of 40, we noted 1 selection included an allocation of cell phone charges for two employees who did not work on the program. As a result of our sampling error, we reviewed all twelve cell phone charges for these two employees charged to the program during the fiscal year ended September 30, 2022 and noted that cell phone charges were improperly charged to the program for the period from November 2021 through August 2022 for a total questioned costs of $869. This is deemed to be a material weakness in internal control over compliance. Effect: Non-payroll costs totaling $869 were inappropriately charged to the federal program. Cause: Southwest Behavioral Health Services, Inc. and Subsidiaries did not have adequate controls in place to properly review and approve non-payroll expenses to ensure only costs associated with employees who worked on the program were charged to the major federal program. Identification as a Repeat Finding: Not a repeat finding Recommendation: Southwest Behavioral Health Services, Inc. and Subsidiaries should implement controls to adequately review and approve non-payroll expenses to ensure only costs associated with employees who worked on the program were charged to the major federal program. Views of Responsible Officials: Management of Southwest Behavioral Health Services concurs with the finding. See Corrective Action Plan.
Finding 2022-005 ? Allowable Costs (Significant Deficiency and Noncompliance) Information on the federal program: U.S. Department of Health and Human Services, Assistance Listing #93.959 Block Grants for Prevention and Treatment of Substance Abuse. Criteria: 2 CFR section 200.405 defines when a cost is allocable to multiple programs and establishes requirements for costs that are allocated to be done so uniformly across all programs. Allocation methods should be based on an appropriate measurement basis and used consistently. In addition, all allowable costs to be allocated must be properly documented and supported. Condition: During audit procedures, 21 non-payroll disbursements and 92 payroll disbursements were tested for allowable cost requirements. Of those tested, three exceptions were noted for costs that were allocated. Cause: For two payroll disbursements, the approved time sheet did not agree and therefore did not support the payroll allocation. The timesheet completed by the employee was not corrected and reapproved to properly reflect the actual time to be allocated to each program. For the non-payroll disbursement, a rent payment allocation did not follow the approved method based on square footage. A revised method was used to include only Montgomery County programs, however, the methodology was not documented and the percentages used did not follow the proportional allocation of the approved method.Effect: The Council was not in compliance with allowable cost requirements. Questioned Costs: None reported Recommendation: We recommend the Council strengthen procedures and documentation policies for costs that are to be allocated to ensure they are consistent and meet compliance requirements. Views of Responsible Officials: See Management?s View and Corrective Action Plan at the end of the report.
Finding 2022-005 ? Allowable Costs (Significant Deficiency and Noncompliance) Information on the federal program: U.S. Department of Health and Human Services, Assistance Listing #93.959 Block Grants for Prevention and Treatment of Substance Abuse. Criteria: 2 CFR section 200.405 defines when a cost is allocable to multiple programs and establishes requirements for costs that are allocated to be done so uniformly across all programs. Allocation methods should be based on an appropriate measurement basis and used consistently. In addition, all allowable costs to be allocated must be properly documented and supported. Condition: During audit procedures, 21 non-payroll disbursements and 92 payroll disbursements were tested for allowable cost requirements. Of those tested, three exceptions were noted for costs that were allocated. Cause: For two payroll disbursements, the approved time sheet did not agree and therefore did not support the payroll allocation. The timesheet completed by the employee was not corrected and reapproved to properly reflect the actual time to be allocated to each program. For the non-payroll disbursement, a rent payment allocation did not follow the approved method based on square footage. A revised method was used to include only Montgomery County programs, however, the methodology was not documented and the percentages used did not follow the proportional allocation of the approved method.Effect: The Council was not in compliance with allowable cost requirements. Questioned Costs: None reported Recommendation: We recommend the Council strengthen procedures and documentation policies for costs that are to be allocated to ensure they are consistent and meet compliance requirements. Views of Responsible Officials: See Management?s View and Corrective Action Plan at the end of the report.
Finding Number: 2022-001 Finding Type: Federal award finding and financial statement finding Federal Assistance Listing No.: 93.591 Program Name: Family Violence Prevention and Services/State Domestic Violence Coalition Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: n/a Grant Number: 2101ORSDVC Federal Award Year: 2021 Control Deficiency Type: Material weakness in internal controls over compliance and financial reporting Instance of Noncompliance: Yes Compliance Requirement: Allowable costs Questioned Costs: None over $25,000 Repeat Finding: Yes Criteria: According to 45 CFR Part 75 Subpart E §75.405 Allocable Costs, a cost is allocable to a particular federal award in accordance with the relative benefits received. Costs that benefit both the federal award and other work of the entity should be distributed in proportions that may be approximated using reasonable methods. All activities which benefit from the costs must receive an appropriate allocation of the costs. Condition: During the audit, it was noted that costs appearing administrative in nature, i.e., contract accountant, insurance, dues and memberships, and audit expenses, were charged to the federal award based on the award budget and were not distributed in an equitable method to all activities that benefited from the costs. Cause: The Coalition’s understanding is that the award allows 100% of these costs, up to the award budgeted amount for management and shared expenses, to be charged to the federal award. Effect: Costs that that benefitted all programs were not distributed in an equitable method to all activities that benefited from the costs. Audit Recommendation: We recommend the Coalition develop controls and procedures to correctly allocate costs to all activities and funding sources that benefited from the costs. Management’s Response: OCADSV added an Administrative Cost Center to its General Ledger effective 10/01/22, the beginning of FY23 and began costing administrative payroll cost to that cost center. Additionally, the organization retrained administrative staff on direct cost allowable activities vs. administrative activities relative to timekeeping and timesheet preparation and the necessity of daily work descriptions supporting the hourly allocation. The Payroll policy that requires supervisors to review and sign off on timesheets and hourly allocations to cost centers was also reviewed. Audit costs for FY22 will be allocated in accordance with 2 CFR 200.405 requirements. Beginning with FY23 all accounting and other admin payroll related cost will be allocated to the administration cost center with the exception of time related to specific grant or other cost center. FY22 grant expenditures were reviewed post year-end and a line-by-line review was conducted to bring the direct and indirect expense cumulative total into compliance with audit findings. Any outstanding reports were adjusted to reflect the adjusted life of grant to current date reporting. Executive, Financial and Grant Management staff will, during FY24, complete the Online Grants Financial management Training available at onlinefmt.training.ojp.gov to improve knowledge and compliance with 2 CFR 200 guidance and requirements. The said training will be incorporated into onboarding processes for any newly hired employee who have direct responsibilities related to grant management and/or reporting. Effective 6/21/23 and ongoing: OCADSV is continuing its’ efforts to implement controls and procedures for directly or indirectly allocating costs to Programs based on the benefit of the cost. Direct allocation is used when a specific budget program line for funding exists, or where Program(s) can be identified. For indirect cost allocation different allocation methods may be used, depending on the cost type and only after the Program(s) where the costs benefited are identified. Financial staff review grant expenditures line by line, using program budgets for additional support, in preparing quarterly funding reimbursements.
Finding Number: 2022-001 Finding Type: Federal award finding and financial statement finding Federal Assistance Listing No.: 93.591 Program Name: Family Violence Prevention and Services/State Domestic Violence Coalition Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: n/a Grant Number: 2101ORSDVC Federal Award Year: 2021 Control Deficiency Type: Material weakness in internal controls over compliance and financial reporting Instance of Noncompliance: Yes Compliance Requirement: Allowable costs Questioned Costs: None over $25,000 Repeat Finding: Yes Criteria: According to 45 CFR Part 75 Subpart E §75.405 Allocable Costs, a cost is allocable to a particular federal award in accordance with the relative benefits received. Costs that benefit both the federal award and other work of the entity should be distributed in proportions that may be approximated using reasonable methods. All activities which benefit from the costs must receive an appropriate allocation of the costs. Condition: During the audit, it was noted that costs appearing administrative in nature, i.e., contract accountant, insurance, dues and memberships, and audit expenses, were charged to the federal award based on the award budget and were not distributed in an equitable method to all activities that benefited from the costs. Cause: The Coalition’s understanding is that the award allows 100% of these costs, up to the award budgeted amount for management and shared expenses, to be charged to the federal award. Effect: Costs that that benefitted all programs were not distributed in an equitable method to all activities that benefited from the costs. Audit Recommendation: We recommend the Coalition develop controls and procedures to correctly allocate costs to all activities and funding sources that benefited from the costs. Management’s Response: OCADSV added an Administrative Cost Center to its General Ledger effective 10/01/22, the beginning of FY23 and began costing administrative payroll cost to that cost center. Additionally, the organization retrained administrative staff on direct cost allowable activities vs. administrative activities relative to timekeeping and timesheet preparation and the necessity of daily work descriptions supporting the hourly allocation. The Payroll policy that requires supervisors to review and sign off on timesheets and hourly allocations to cost centers was also reviewed. Audit costs for FY22 will be allocated in accordance with 2 CFR 200.405 requirements. Beginning with FY23 all accounting and other admin payroll related cost will be allocated to the administration cost center with the exception of time related to specific grant or other cost center. FY22 grant expenditures were reviewed post year-end and a line-by-line review was conducted to bring the direct and indirect expense cumulative total into compliance with audit findings. Any outstanding reports were adjusted to reflect the adjusted life of grant to current date reporting. Executive, Financial and Grant Management staff will, during FY24, complete the Online Grants Financial management Training available at onlinefmt.training.ojp.gov to improve knowledge and compliance with 2 CFR 200 guidance and requirements. The said training will be incorporated into onboarding processes for any newly hired employee who have direct responsibilities related to grant management and/or reporting. Effective 6/21/23 and ongoing: OCADSV is continuing its’ efforts to implement controls and procedures for directly or indirectly allocating costs to Programs based on the benefit of the cost. Direct allocation is used when a specific budget program line for funding exists, or where Program(s) can be identified. For indirect cost allocation different allocation methods may be used, depending on the cost type and only after the Program(s) where the costs benefited are identified. Financial staff review grant expenditures line by line, using program budgets for additional support, in preparing quarterly funding reimbursements.
Significant deficiency in internal controls over compliance and instances of noncompliance related to allowable costs. Federal Agency: Department of Health and Human Services Program Title: National Organizations of State and Local Officials CFDA Number: 93.011 Award Numbers: 1 G32HS42592-01-00 Award Period: July 31, 2021 - July 31, 2023 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart E section 2 CFR 200.405 (as codified by the Department of Health and Human Services [DHHS] in 45 CFR 75) requires direct costs be allocated based on the proportional benefit received by each award. Condition/Context for Evaluation In a population of 25 payroll costs, we noted four instances in which the amount allocated to the award was a rounded percentage instead of the true calculated percentage. This resulted in three instances of overcharge to the award and one instance of undercharge to the award. Questioned Costs $76.58. Cause Due to turnover in staff, there was no standard procedure followed for how the payroll costs should be calculated and applied to the federal award. This resulted in an overall overcharge to the award compared to what the actual allocation percentage would have charged. Effect or Potential Effect The Organization did not have sufficient internal controls in place to review allocated costs for accuracy. Repeat Finding Not applicable. Recommendation We recommend that the Organization implement internal controls over payroll costs charged to awards to ensure they are calculated and allocated in accordance with 2 CFR 200.405. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying corrective action plan.
Item: 2022-002 Assistance Listing Number: 14.231 Programs: COVID-19 - Emergency Solutions Grant ? Homeless Street Outreach Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agencies: City of Phoenix Pass-Through Grantor Identifying Number: 154962-0 Award Year: July 1, 2021 ? June 30, 2022 and July 1, 2022 ? September 30, 2022 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR ? 200.405 - Allocable costs ? 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 is incurred specifically for the Federal award, 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 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 subpart E. Condition: In fiscal year 2022, the Organization did not have an adequate process to review and approve employee cell phone costs charged to the program resulting in non-program costs being charged to the program. One employee's phone bill continued to be charged to the grant after they stopped working on the program. Questioned Costs: $1,051 Context: In a population of 75 non-payroll costs charged to the program, we conducted a non-statistical sample of 40 non-payroll costs charged to the program. In our sample of 40, we noted 4 selections included an allocation of cell phone charges for an employee who did not work on the program. Additionally, we noted 1 of the same 40 selections did not have the proper review and approval before being paid. As a result of our sampling error, we reviewed all twelve cell phone charges for this employee charged to the program during the fiscal year ended September 30, 2022 and noted that cell phone charges were improperly charged to the program for the period from November 2021 through August 2022 for a total questioned costs of $1,051. This is deemed to be a material weakness in internal control over compliance. Effect: Non-payroll costs totaling $1,051 were inappropriately charged to the federal program. Cause: Southwest Behavioral Health Services, Inc. and Subsidiaries did not have adequate controls in place to properly review and approve non-payroll expenses to ensure only costs associated with employees who worked on the program were charged to the major federal program. Identification as a Repeat Finding: Not a repeat finding Recommendation: Southwest Behavioral Health Services, Inc. and Subsidiaries should implement controls to adequately review and approve non-payroll expenses to ensure only costs associated with employees who worked on the program were charged to the major federal program. Views of Responsible Officials: Management of Southwest Behavioral Health Services concurs with the finding. See Corrective Action Plan.
Item: 2022-003 Assistance Listing Number: 14.241 Programs: Housing Opportunities for Persons with AIDS Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agencies: City of Phoenix Pass-Through Grantor Identifying Number: 144347 Award Year: July 1, 2021 ? June 30, 2022 and July 1, 2022 ? June 30, 2023 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR ? 200.405 - Allocable costs ? 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 is incurred specifically for the Federal award, 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 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 subpart E. Condition: In fiscal year 2022, the Organization did not have an adequate process to review and approve employee cell phone costs charged to the program resulting in non-program costs being charged to the program. Questioned Costs: $869 Context: In a population of over 250 non-payroll costs charged to the program, we conducted a non-statistical sample of 40 non-payroll costs charged to the program. In our sample of 40, we noted 1 selection included an allocation of cell phone charges for two employees who did not work on the program. As a result of our sampling error, we reviewed all twelve cell phone charges for these two employees charged to the program during the fiscal year ended September 30, 2022 and noted that cell phone charges were improperly charged to the program for the period from November 2021 through August 2022 for a total questioned costs of $869. This is deemed to be a material weakness in internal control over compliance. Effect: Non-payroll costs totaling $869 were inappropriately charged to the federal program. Cause: Southwest Behavioral Health Services, Inc. and Subsidiaries did not have adequate controls in place to properly review and approve non-payroll expenses to ensure only costs associated with employees who worked on the program were charged to the major federal program. Identification as a Repeat Finding: Not a repeat finding Recommendation: Southwest Behavioral Health Services, Inc. and Subsidiaries should implement controls to adequately review and approve non-payroll expenses to ensure only costs associated with employees who worked on the program were charged to the major federal program. Views of Responsible Officials: Management of Southwest Behavioral Health Services concurs with the finding. See Corrective Action Plan.
Finding 2022-005 ? Allowable Costs (Significant Deficiency and Noncompliance) Information on the federal program: U.S. Department of Health and Human Services, Assistance Listing #93.959 Block Grants for Prevention and Treatment of Substance Abuse. Criteria: 2 CFR section 200.405 defines when a cost is allocable to multiple programs and establishes requirements for costs that are allocated to be done so uniformly across all programs. Allocation methods should be based on an appropriate measurement basis and used consistently. In addition, all allowable costs to be allocated must be properly documented and supported. Condition: During audit procedures, 21 non-payroll disbursements and 92 payroll disbursements were tested for allowable cost requirements. Of those tested, three exceptions were noted for costs that were allocated. Cause: For two payroll disbursements, the approved time sheet did not agree and therefore did not support the payroll allocation. The timesheet completed by the employee was not corrected and reapproved to properly reflect the actual time to be allocated to each program. For the non-payroll disbursement, a rent payment allocation did not follow the approved method based on square footage. A revised method was used to include only Montgomery County programs, however, the methodology was not documented and the percentages used did not follow the proportional allocation of the approved method.Effect: The Council was not in compliance with allowable cost requirements. Questioned Costs: None reported Recommendation: We recommend the Council strengthen procedures and documentation policies for costs that are to be allocated to ensure they are consistent and meet compliance requirements. Views of Responsible Officials: See Management?s View and Corrective Action Plan at the end of the report.
Finding 2022-005 ? Allowable Costs (Significant Deficiency and Noncompliance) Information on the federal program: U.S. Department of Health and Human Services, Assistance Listing #93.959 Block Grants for Prevention and Treatment of Substance Abuse. Criteria: 2 CFR section 200.405 defines when a cost is allocable to multiple programs and establishes requirements for costs that are allocated to be done so uniformly across all programs. Allocation methods should be based on an appropriate measurement basis and used consistently. In addition, all allowable costs to be allocated must be properly documented and supported. Condition: During audit procedures, 21 non-payroll disbursements and 92 payroll disbursements were tested for allowable cost requirements. Of those tested, three exceptions were noted for costs that were allocated. Cause: For two payroll disbursements, the approved time sheet did not agree and therefore did not support the payroll allocation. The timesheet completed by the employee was not corrected and reapproved to properly reflect the actual time to be allocated to each program. For the non-payroll disbursement, a rent payment allocation did not follow the approved method based on square footage. A revised method was used to include only Montgomery County programs, however, the methodology was not documented and the percentages used did not follow the proportional allocation of the approved method.Effect: The Council was not in compliance with allowable cost requirements. Questioned Costs: None reported Recommendation: We recommend the Council strengthen procedures and documentation policies for costs that are to be allocated to ensure they are consistent and meet compliance requirements. Views of Responsible Officials: See Management?s View and Corrective Action Plan at the end of the report.
Finding Number: 2022-001 Finding Type: Federal award finding and financial statement finding Federal Assistance Listing No.: 93.591 Program Name: Family Violence Prevention and Services/State Domestic Violence Coalition Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: n/a Grant Number: 2101ORSDVC Federal Award Year: 2021 Control Deficiency Type: Material weakness in internal controls over compliance and financial reporting Instance of Noncompliance: Yes Compliance Requirement: Allowable costs Questioned Costs: None over $25,000 Repeat Finding: Yes Criteria: According to 45 CFR Part 75 Subpart E §75.405 Allocable Costs, a cost is allocable to a particular federal award in accordance with the relative benefits received. Costs that benefit both the federal award and other work of the entity should be distributed in proportions that may be approximated using reasonable methods. All activities which benefit from the costs must receive an appropriate allocation of the costs. Condition: During the audit, it was noted that costs appearing administrative in nature, i.e., contract accountant, insurance, dues and memberships, and audit expenses, were charged to the federal award based on the award budget and were not distributed in an equitable method to all activities that benefited from the costs. Cause: The Coalition’s understanding is that the award allows 100% of these costs, up to the award budgeted amount for management and shared expenses, to be charged to the federal award. Effect: Costs that that benefitted all programs were not distributed in an equitable method to all activities that benefited from the costs. Audit Recommendation: We recommend the Coalition develop controls and procedures to correctly allocate costs to all activities and funding sources that benefited from the costs. Management’s Response: OCADSV added an Administrative Cost Center to its General Ledger effective 10/01/22, the beginning of FY23 and began costing administrative payroll cost to that cost center. Additionally, the organization retrained administrative staff on direct cost allowable activities vs. administrative activities relative to timekeeping and timesheet preparation and the necessity of daily work descriptions supporting the hourly allocation. The Payroll policy that requires supervisors to review and sign off on timesheets and hourly allocations to cost centers was also reviewed. Audit costs for FY22 will be allocated in accordance with 2 CFR 200.405 requirements. Beginning with FY23 all accounting and other admin payroll related cost will be allocated to the administration cost center with the exception of time related to specific grant or other cost center. FY22 grant expenditures were reviewed post year-end and a line-by-line review was conducted to bring the direct and indirect expense cumulative total into compliance with audit findings. Any outstanding reports were adjusted to reflect the adjusted life of grant to current date reporting. Executive, Financial and Grant Management staff will, during FY24, complete the Online Grants Financial management Training available at onlinefmt.training.ojp.gov to improve knowledge and compliance with 2 CFR 200 guidance and requirements. The said training will be incorporated into onboarding processes for any newly hired employee who have direct responsibilities related to grant management and/or reporting. Effective 6/21/23 and ongoing: OCADSV is continuing its’ efforts to implement controls and procedures for directly or indirectly allocating costs to Programs based on the benefit of the cost. Direct allocation is used when a specific budget program line for funding exists, or where Program(s) can be identified. For indirect cost allocation different allocation methods may be used, depending on the cost type and only after the Program(s) where the costs benefited are identified. Financial staff review grant expenditures line by line, using program budgets for additional support, in preparing quarterly funding reimbursements.
Finding Number: 2022-001 Finding Type: Federal award finding and financial statement finding Federal Assistance Listing No.: 93.591 Program Name: Family Violence Prevention and Services/State Domestic Violence Coalition Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: n/a Grant Number: 2101ORSDVC Federal Award Year: 2021 Control Deficiency Type: Material weakness in internal controls over compliance and financial reporting Instance of Noncompliance: Yes Compliance Requirement: Allowable costs Questioned Costs: None over $25,000 Repeat Finding: Yes Criteria: According to 45 CFR Part 75 Subpart E §75.405 Allocable Costs, a cost is allocable to a particular federal award in accordance with the relative benefits received. Costs that benefit both the federal award and other work of the entity should be distributed in proportions that may be approximated using reasonable methods. All activities which benefit from the costs must receive an appropriate allocation of the costs. Condition: During the audit, it was noted that costs appearing administrative in nature, i.e., contract accountant, insurance, dues and memberships, and audit expenses, were charged to the federal award based on the award budget and were not distributed in an equitable method to all activities that benefited from the costs. Cause: The Coalition’s understanding is that the award allows 100% of these costs, up to the award budgeted amount for management and shared expenses, to be charged to the federal award. Effect: Costs that that benefitted all programs were not distributed in an equitable method to all activities that benefited from the costs. Audit Recommendation: We recommend the Coalition develop controls and procedures to correctly allocate costs to all activities and funding sources that benefited from the costs. Management’s Response: OCADSV added an Administrative Cost Center to its General Ledger effective 10/01/22, the beginning of FY23 and began costing administrative payroll cost to that cost center. Additionally, the organization retrained administrative staff on direct cost allowable activities vs. administrative activities relative to timekeeping and timesheet preparation and the necessity of daily work descriptions supporting the hourly allocation. The Payroll policy that requires supervisors to review and sign off on timesheets and hourly allocations to cost centers was also reviewed. Audit costs for FY22 will be allocated in accordance with 2 CFR 200.405 requirements. Beginning with FY23 all accounting and other admin payroll related cost will be allocated to the administration cost center with the exception of time related to specific grant or other cost center. FY22 grant expenditures were reviewed post year-end and a line-by-line review was conducted to bring the direct and indirect expense cumulative total into compliance with audit findings. Any outstanding reports were adjusted to reflect the adjusted life of grant to current date reporting. Executive, Financial and Grant Management staff will, during FY24, complete the Online Grants Financial management Training available at onlinefmt.training.ojp.gov to improve knowledge and compliance with 2 CFR 200 guidance and requirements. The said training will be incorporated into onboarding processes for any newly hired employee who have direct responsibilities related to grant management and/or reporting. Effective 6/21/23 and ongoing: OCADSV is continuing its’ efforts to implement controls and procedures for directly or indirectly allocating costs to Programs based on the benefit of the cost. Direct allocation is used when a specific budget program line for funding exists, or where Program(s) can be identified. For indirect cost allocation different allocation methods may be used, depending on the cost type and only after the Program(s) where the costs benefited are identified. Financial staff review grant expenditures line by line, using program budgets for additional support, in preparing quarterly funding reimbursements.
2022-002 – Allocation Percentage Charged – Significant Deficiency in Internal Controls over Compliance ALN: 84.126 Federal Award Title: Rehabilitation Services Vocational Rehabilitation Grants to States Federal Agency: United States Department of Education Pass-Through Entity: Texas Health and Human Services Commission Award Number(s): HHS000186000005, HHS000202900008 Federal Award Year: 2022 Condition: The Entity charged the incorrect allocation % in 9 out of 20 nonpayroll expenses and 5 out of 25 payroll expenses. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entities is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR 200.405(a)(2), costs allocated to a Federal award must be distributed in proportions that may be approximated using reasonable methods. Effect: The Entity may unintentionally under/over charge expenses to the grant which could lead to questioned costs and repayment of funds to the Grantor agency. Cause: The Entity does not have proper controls in place to verify the approved allocation % is charged on expenses. Questioned Costs: Nonpayroll allocated costs – known questioned costs of $727 and likely questioned costs of $14,513. Payroll allocated costs – No questioned costs. Federal award was undercharged by $71 and, when extrapolated, the undercharge was calculated at $7,132. Combined questioned costs: known questioned costs of $655 and likely questioned costs of $7,381
2022-002 – Allocation Percentage Charged – Significant Deficiency in Internal Controls over Compliance ALN: 84.126 Federal Award Title: Rehabilitation Services Vocational Rehabilitation Grants to States Federal Agency: United States Department of Education Pass-Through Entity: Texas Health and Human Services Commission Award Number(s): HHS000186000005, HHS000202900008 Federal Award Year: 2022 Condition: The Entity charged the incorrect allocation % in 9 out of 20 nonpayroll expenses and 5 out of 25 payroll expenses. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entities is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR 200.405(a)(2), costs allocated to a Federal award must be distributed in proportions that may be approximated using reasonable methods. Effect: The Entity may unintentionally under/over charge expenses to the grant which could lead to questioned costs and repayment of funds to the Grantor agency. Cause: The Entity does not have proper controls in place to verify the approved allocation % is charged on expenses. Questioned Costs: Nonpayroll allocated costs – known questioned costs of $727 and likely questioned costs of $14,513. Payroll allocated costs – No questioned costs. Federal award was undercharged by $71 and, when extrapolated, the undercharge was calculated at $7,132. Combined questioned costs: known questioned costs of $655 and likely questioned costs of $7,381
2022-002 – Allocation Percentage Charged – Significant Deficiency in Internal Controls over Compliance ALN: 84.126 Federal Award Title: Rehabilitation Services Vocational Rehabilitation Grants to States Federal Agency: United States Department of Education Pass-Through Entity: Texas Health and Human Services Commission Award Number(s): HHS000186000005, HHS000202900008 Federal Award Year: 2022 Condition: The Entity charged the incorrect allocation % in 9 out of 20 nonpayroll expenses and 5 out of 25 payroll expenses. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entities is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR 200.405(a)(2), costs allocated to a Federal award must be distributed in proportions that may be approximated using reasonable methods. Effect: The Entity may unintentionally under/over charge expenses to the grant which could lead to questioned costs and repayment of funds to the Grantor agency. Cause: The Entity does not have proper controls in place to verify the approved allocation % is charged on expenses. Questioned Costs: Nonpayroll allocated costs – known questioned costs of $727 and likely questioned costs of $14,513. Payroll allocated costs – No questioned costs. Federal award was undercharged by $71 and, when extrapolated, the undercharge was calculated at $7,132. Combined questioned costs: known questioned costs of $655 and likely questioned costs of $7,381
2022-002 – Allocation Percentage Charged – Significant Deficiency in Internal Controls over Compliance ALN: 84.126 Federal Award Title: Rehabilitation Services Vocational Rehabilitation Grants to States Federal Agency: United States Department of Education Pass-Through Entity: Texas Health and Human Services Commission Award Number(s): HHS000186000005, HHS000202900008 Federal Award Year: 2022 Condition: The Entity charged the incorrect allocation % in 9 out of 20 nonpayroll expenses and 5 out of 25 payroll expenses. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entities is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR 200.405(a)(2), costs allocated to a Federal award must be distributed in proportions that may be approximated using reasonable methods. Effect: The Entity may unintentionally under/over charge expenses to the grant which could lead to questioned costs and repayment of funds to the Grantor agency. Cause: The Entity does not have proper controls in place to verify the approved allocation % is charged on expenses. Questioned Costs: Nonpayroll allocated costs – known questioned costs of $727 and likely questioned costs of $14,513. Payroll allocated costs – No questioned costs. Federal award was undercharged by $71 and, when extrapolated, the undercharge was calculated at $7,132. Combined questioned costs: known questioned costs of $655 and likely questioned costs of $7,381
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.
Finding 2022-004 ? Unallowable Use of Public Housing Program Funds (Significant Deficiency, Non-compliance) Public Housing Program ? Assistance Listing No. 14.850a, Grant Period: Fiscal Year-End June 30, 2022 Criteria The cost principles in 2 CFR Part 200, Sub-part E of the Uniform Guidance describe allowable and unallowable uses of federal award program subsidies. Parts 200.403 and 200.405 prohibit the use of federal award program subsidies to fund expenditures outside of the applicable federal award program. Public Housing Program funds cannot be used to fund expenditures and/or deficits of other federal or non-federal programs. HUD Handbook 7475.1 defines allowable expenditures under Public Housing Program versus expenditures of the Central Office Cost Center (COCC). Equipment purchases of the COCC should not be charged to the Public Housing Program. Condition, Cause, Perspective and Questioned Costs During fiscal year 2022, the Authority charged the purchase of an administrative vehicle, in the amount of $35,256, to the Public Housing Program. Effect Non-compliance with federal requirements with respect to the Public Housing Program. Recommendation We recommend that the Authority review allowable Public Housing Program versus COCC expenditures in HUD Handbook 7575.1 and refrain from charging COCC expenditures to the Public Housing Program. Management?s Response The Authority review allowable Public Housing Program versus COCC expenditures in HUD Handbook 7575.1 and refrain from charging COCC expenditures to the Public Housing Program. The Authority?s Executive Director, Africa Porter, has assumed the responsibility of executing this corrective action as of April 1, 2023.