2022-001 Federal Agency: U.S. Small Business Administration Federal Program Title: Shuttered Venue Operators Grant Assistance Listing Number: 59.075 Award Period: July 1, 2022 ? June 30, 2022 Type of Finding: Other Matter and Significant Deficiency over Internal Control over Compliance Criteria: Funds applied to the SVOG award must follow 2 CFR 200 Subpart E, Cost Principles. Within 200.406 of the cost principles, it states: Applicable credits refer to those receipts or reduction-of-expenditure-type transactions that offset or reduce expense items allocable to the federal award as direct or indirect (F&A) costs. To the extent that such credits accruing to or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award either as a cost reduction or cash refund, as appropriate. Condition: Marbles Kids Museum applied a $75 expenditure to the grant for which they were later refunded. Questioned costs: None Context: During our testing of 60 samples, we noted one item for a $76 expenditure that was returned and refunded to Marbles Kids Museum, however this expenditure was applied to the grant. Extrapolated to the entire population, an estimated $1,263 of expenditures would be incorrectly applied to the grant. Management has asserted this is the only instance of this issue. Cause: Marbles Kids Museum did not have a process in place to ensure credit amounts were not applied to the grant. Effect: Marbles Kids Museum could apply an ineligible expenditure to the grant. Repeat Finding: No Recommendation: We recommend management implement a process to ensure expenditures applied to the grant are net of applicable credits. Views of responsible officials: We agree with the auditor?s findings and have taken the following actions to improve our procedures. Federal grants awarded to Marbles Kids Museum are typically monitored by a team ? including individuals from accounting, development, and the learning and exhibits department ? which meets regularly to discuss progress on the grant and review expenses which are recorded under a unique account in the general ledger system. The Shuttered Venue Operators Grant differed from our usual federal grants in several respects: It allowed expenses that were incurred up to 15 months prior to the date of the award; the grant was not for a specific program but to cover specific operational costs to sustain the organization through the COVID-19 pandemic; and the grant was managed by the accounting department. The expense in question was for two items totaling $75 with one item being returned later for $38. We brought the error to the attention of the auditors as soon as it was discovered. Going forward all federal grants will be reviewed by a group consisting of at least two departments familiar with the expenses, with one department being the accounting department. In addition, all credits from vendors that are used for federal grants will be reviewed to confirm they are not related to items originally purchased for a federal grant. If the credit is related to an expense allocated to a federal grant the credit will be netted against the expense.
2020-108 Lack of Controls over Costs Submitted for Reimbursement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization included an invoice for reimbursement under the program for which a vendor credit memo for the full amount of the invoice had been received due to miscoding of the credit memo to the correct COVID-19 class on the general ledger. In addition, the Organization did not include an applicable invoice for COVID-19 expenses for reimbursement due to the same miscoding of the COVID-19 class to the general ledger. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under compliance requirements for allowable costs 2 CFR section 200.405(a)(1) costs should be incurred specifically for the federal award, and 2 CFR section 200.406(a) to the extent credits accruing or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award program either as a cost reduction or cash refund as appropriate. Cause: The Organization did not apply the credit memo or the invoice to the correct general ledger classification resulting in the credit memo and invoice being incorrectly included or not included in the reimbursement request. Effect: The Organization is not applying for reimbursement with the correct supporting documentation which could lead to a loss of grant funding. Recommendation: The Organization should review the posting of any credit memos or applicable invoices to ensure they are posted to the correct account/classification so that only allowable costs which were incurred during the period of performance are included on any reimbursement requests. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing the posting of credit memos or applicable invoices to ensure they are posted correctly. We will update our policy to include a process for review of credit memos prior to posting. The planned corrective action for this finding is currently in the process of development, approval, and implementation.
2020-108 Lack of Controls over Costs Submitted for Reimbursement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization included an invoice for reimbursement under the program for which a vendor credit memo for the full amount of the invoice had been received due to miscoding of the credit memo to the correct COVID-19 class on the general ledger. In addition, the Organization did not include an applicable invoice for COVID-19 expenses for reimbursement due to the same miscoding of the COVID-19 class to the general ledger. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under compliance requirements for allowable costs 2 CFR section 200.405(a)(1) costs should be incurred specifically for the federal award, and 2 CFR section 200.406(a) to the extent credits accruing or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award program either as a cost reduction or cash refund as appropriate. Cause: The Organization did not apply the credit memo or the invoice to the correct general ledger classification resulting in the credit memo and invoice being incorrectly included or not included in the reimbursement request. Effect: The Organization is not applying for reimbursement with the correct supporting documentation which could lead to a loss of grant funding. Recommendation: The Organization should review the posting of any credit memos or applicable invoices to ensure they are posted to the correct account/classification so that only allowable costs which were incurred during the period of performance are included on any reimbursement requests. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing the posting of credit memos or applicable invoices to ensure they are posted correctly. We will update our policy to include a process for review of credit memos prior to posting. The planned corrective action for this finding is currently in the process of development, approval, and implementation.
2020-108 Lack of Controls over Costs Submitted for Reimbursement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization included an invoice for reimbursement under the program for which a vendor credit memo for the full amount of the invoice had been received due to miscoding of the credit memo to the correct COVID-19 class on the general ledger. In addition, the Organization did not include an applicable invoice for COVID-19 expenses for reimbursement due to the same miscoding of the COVID-19 class to the general ledger. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under compliance requirements for allowable costs 2 CFR section 200.405(a)(1) costs should be incurred specifically for the federal award, and 2 CFR section 200.406(a) to the extent credits accruing or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award program either as a cost reduction or cash refund as appropriate. Cause: The Organization did not apply the credit memo or the invoice to the correct general ledger classification resulting in the credit memo and invoice being incorrectly included or not included in the reimbursement request. Effect: The Organization is not applying for reimbursement with the correct supporting documentation which could lead to a loss of grant funding. Recommendation: The Organization should review the posting of any credit memos or applicable invoices to ensure they are posted to the correct account/classification so that only allowable costs which were incurred during the period of performance are included on any reimbursement requests. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing the posting of credit memos or applicable invoices to ensure they are posted correctly. We will update our policy to include a process for review of credit memos prior to posting. The planned corrective action for this finding is currently in the process of development, approval, and implementation.
2020-108 Lack of Controls over Costs Submitted for Reimbursement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization included an invoice for reimbursement under the program for which a vendor credit memo for the full amount of the invoice had been received due to miscoding of the credit memo to the correct COVID-19 class on the general ledger. In addition, the Organization did not include an applicable invoice for COVID-19 expenses for reimbursement due to the same miscoding of the COVID-19 class to the general ledger. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under compliance requirements for allowable costs 2 CFR section 200.405(a)(1) costs should be incurred specifically for the federal award, and 2 CFR section 200.406(a) to the extent credits accruing or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award program either as a cost reduction or cash refund as appropriate. Cause: The Organization did not apply the credit memo or the invoice to the correct general ledger classification resulting in the credit memo and invoice being incorrectly included or not included in the reimbursement request. Effect: The Organization is not applying for reimbursement with the correct supporting documentation which could lead to a loss of grant funding. Recommendation: The Organization should review the posting of any credit memos or applicable invoices to ensure they are posted to the correct account/classification so that only allowable costs which were incurred during the period of performance are included on any reimbursement requests. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing the posting of credit memos or applicable invoices to ensure they are posted correctly. We will update our policy to include a process for review of credit memos prior to posting. The planned corrective action for this finding is currently in the process of development, approval, and implementation.
2020-108 Lack of Controls over Costs Submitted for Reimbursement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization included an invoice for reimbursement under the program for which a vendor credit memo for the full amount of the invoice had been received due to miscoding of the credit memo to the correct COVID-19 class on the general ledger. In addition, the Organization did not include an applicable invoice for COVID-19 expenses for reimbursement due to the same miscoding of the COVID-19 class to the general ledger. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under compliance requirements for allowable costs 2 CFR section 200.405(a)(1) costs should be incurred specifically for the federal award, and 2 CFR section 200.406(a) to the extent credits accruing or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award program either as a cost reduction or cash refund as appropriate. Cause: The Organization did not apply the credit memo or the invoice to the correct general ledger classification resulting in the credit memo and invoice being incorrectly included or not included in the reimbursement request. Effect: The Organization is not applying for reimbursement with the correct supporting documentation which could lead to a loss of grant funding. Recommendation: The Organization should review the posting of any credit memos or applicable invoices to ensure they are posted to the correct account/classification so that only allowable costs which were incurred during the period of performance are included on any reimbursement requests. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing the posting of credit memos or applicable invoices to ensure they are posted correctly. We will update our policy to include a process for review of credit memos prior to posting. The planned corrective action for this finding is currently in the process of development, approval, and implementation.
2020-108 Lack of Controls over Costs Submitted for Reimbursement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization included an invoice for reimbursement under the program for which a vendor credit memo for the full amount of the invoice had been received due to miscoding of the credit memo to the correct COVID-19 class on the general ledger. In addition, the Organization did not include an applicable invoice for COVID-19 expenses for reimbursement due to the same miscoding of the COVID-19 class to the general ledger. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under compliance requirements for allowable costs 2 CFR section 200.405(a)(1) costs should be incurred specifically for the federal award, and 2 CFR section 200.406(a) to the extent credits accruing or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award program either as a cost reduction or cash refund as appropriate. Cause: The Organization did not apply the credit memo or the invoice to the correct general ledger classification resulting in the credit memo and invoice being incorrectly included or not included in the reimbursement request. Effect: The Organization is not applying for reimbursement with the correct supporting documentation which could lead to a loss of grant funding. Recommendation: The Organization should review the posting of any credit memos or applicable invoices to ensure they are posted to the correct account/classification so that only allowable costs which were incurred during the period of performance are included on any reimbursement requests. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing the posting of credit memos or applicable invoices to ensure they are posted correctly. We will update our policy to include a process for review of credit memos prior to posting. The planned corrective action for this finding is currently in the process of development, approval, and implementation.
2020-108 Lack of Controls over Costs Submitted for Reimbursement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization included an invoice for reimbursement under the program for which a vendor credit memo for the full amount of the invoice had been received due to miscoding of the credit memo to the correct COVID-19 class on the general ledger. In addition, the Organization did not include an applicable invoice for COVID-19 expenses for reimbursement due to the same miscoding of the COVID-19 class to the general ledger. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under compliance requirements for allowable costs 2 CFR section 200.405(a)(1) costs should be incurred specifically for the federal award, and 2 CFR section 200.406(a) to the extent credits accruing or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award program either as a cost reduction or cash refund as appropriate. Cause: The Organization did not apply the credit memo or the invoice to the correct general ledger classification resulting in the credit memo and invoice being incorrectly included or not included in the reimbursement request. Effect: The Organization is not applying for reimbursement with the correct supporting documentation which could lead to a loss of grant funding. Recommendation: The Organization should review the posting of any credit memos or applicable invoices to ensure they are posted to the correct account/classification so that only allowable costs which were incurred during the period of performance are included on any reimbursement requests. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing the posting of credit memos or applicable invoices to ensure they are posted correctly. We will update our policy to include a process for review of credit memos prior to posting. The planned corrective action for this finding is currently in the process of development, approval, and implementation.
2020-108 Lack of Controls over Costs Submitted for Reimbursement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization included an invoice for reimbursement under the program for which a vendor credit memo for the full amount of the invoice had been received due to miscoding of the credit memo to the correct COVID-19 class on the general ledger. In addition, the Organization did not include an applicable invoice for COVID-19 expenses for reimbursement due to the same miscoding of the COVID-19 class to the general ledger. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under compliance requirements for allowable costs 2 CFR section 200.405(a)(1) costs should be incurred specifically for the federal award, and 2 CFR section 200.406(a) to the extent credits accruing or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award program either as a cost reduction or cash refund as appropriate. Cause: The Organization did not apply the credit memo or the invoice to the correct general ledger classification resulting in the credit memo and invoice being incorrectly included or not included in the reimbursement request. Effect: The Organization is not applying for reimbursement with the correct supporting documentation which could lead to a loss of grant funding. Recommendation: The Organization should review the posting of any credit memos or applicable invoices to ensure they are posted to the correct account/classification so that only allowable costs which were incurred during the period of performance are included on any reimbursement requests. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing the posting of credit memos or applicable invoices to ensure they are posted correctly. We will update our policy to include a process for review of credit memos prior to posting. The planned corrective action for this finding is currently in the process of development, approval, and implementation.