Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
2021-003 – ALLOWABLE COSTS/COST PRINCIPLES-PAYROLL DOCUMENTATION (Continued) Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. (3) In accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR part 516), charges for the salaries and wages of nonexempt employees, in addition to the supporting documentation described in this section, must also be supported by records indicating the total number of hours worked each day. 2 CFR 200.313 stipulates the identification with the Federal award rather than the nature of the goods and services involved is the determining factor in distinguishing direct from indirect (F&A) costs of Federal awards. Typical costs charged directly to a Federal award are the compensation of employees who work on that award, their related fringe benefit costs, the costs of materials and other items of expense incurred for the Federal award. If directly related to a specific award, certain costs that otherwise would be treated as indirect costs may also be considered direct costs. 2 CFR 200.414 stipulates that because of the diverse characteristics and accounting practices of nonprofit organizations, it is not possible to specify the types of cost which may be classified as indirect (F&A) cost in all situations. Identification with a Federal award rather than the nature of the goods and services involved is the determining factor in distinguishing direct from indirect (F&A) costs of Federal awards. However, typical examples of indirect (F&A) cost for many nonprofit organizations may 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. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued) 2021-003 – ALLOWABLE COSTS/COST PRINCIPLES-PAYROLL DOCUMENTATION (Continued) Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 Condition: All employees paid with federal funds are paid a fixed salary pursuant to an employment contract established prior to the calendar year. Estimates for salaries were made prior to the services being performed. However, there was a lack of documentation, which substantiates that the payroll charged was accurate, allowable and properly allocated. Furthermore, there was no documentation of days or hours worked per day in accordance with federal guidelines. Officials recorded all personnel costs as indirect (which is consistent with the treatment of these expenses in prior years) expenses. However, the budget award document indicates a large portion of personnel costs to be classified as direct charges. Questioned Costs: Unknown. Context: Salaries and related fringe benefits of $576,127 were expended under the federal award. Total federal expenditures listed on the Schedule of Federal Awards was $6,267,848. Cause: Internal controls and procedures related to the payroll documentation were not effectively designed or performed. Effect: National Center for the Advancement of STEM Education, Inc. is not in compliance with the documentation requirements related to salaries and wages. Recommendation: We recommend that management implement policies and procedures to ensure that documentation of salaries and wages are maintained in a manner consistent with federal requirements. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the finding.
Criteria: Title 2 of the Code of Federal Regulations (2 CFR), Part 200, Subpart E defines and discusses the federal cost principles that apply to federal awards administered by nonprofit organizations. The applicable sections of these cost principes are as follows: • 2 CFR 200.403 Factors affecting allowability of costs • 2 CFR 200.404 Reasonable costs • 2 CFR 200.405 Allocable costs • 2 CFR 200.413 Direct costs • 2 CFR 200.414 Indirect (F&A) costs Condition: The following were noted as related to compliance with allowable costs, cost allocation and federal cost principles: • Internal control on time spent by employees related to administrative functions or other indirect cost activities has not been properly designed or implemented. • All employee time, including employees and professional services contractors are being recorded directly to programs. Time spent on indirect activities is not being properly identified or properly allocated to programs. • A portion of time of the Operations Manager (Chief Executive of the Organization) is spent related to administrative time or other indirect cost activities. However, none of that time has been identified or charged as indirect costs. • The time card for the Operations Manager (Chief Executive of the Organization) is not reviewed or approved by a board member or other senior executive of the Organization. • The accounting services of AIRS is being provided by a third-party outsourced accountant. The costs related to these services were improperly recorded as direct personnel costs to the program rather than properly classified as indirect costs. • Payroll taxes, employee benefits and other allowable employee related expenses were allocated to the program in a manner that does not accurately reflect the relative benefits received. These costs were allocated to the program as a percentage of total payroll costs, however, the percentage used exceeds that actual percentage of these costs as a percentage of total payroll costs. • A reasonable, consistent and uniform cost allocation methodology has not been properly designed or implemented. Costs that benefit both federal programs, non-federal programs and indirect costs are not being allocated properly across and to federal programs, non-federal programs and indirect costs in a reasonable, consistent and uniform manner. • Certain direct costs charged to the program were not based on actual costs incurred and the amounts charged were not adequately supported. • Indirect costs were not properly identified and segregated from direct costs. • Allowable indirect costs were not charged to the federal program. Cause: AIRS accounting staff and senior management do not appear to have a full and complete understanding of Uniform Guidance or of the applicable federal cost principles. Management has not properly applied the applicable federal costs principles in 2 CFR, Part 200, Subpart E to the costs charged to the federal program. Effect: Payroll costs and allowable employee related expenses, certain direct costs, allocable direct costs and indirect costs were not properly charged to the federal program. In order to estimate the questioned costs, the auditor, with the assistance of management, developed a costs allocation methodology that charges costs to the federal program in a reasonable, consistent and uniform manner in compliance with the costs principles contained in 2 CFR, Part 200, Subpart E. The primarily characteristics of this methodology are as follows: • Based upon discussions with management, review of the job description, roles and responsibilities of the Operations Manager and using prior experience and comparison to similar nonprofit organizations; an estimate of the percentage of time spent by the Operations Manager related to administration and other indirect activities was developed. • The time for the outsourced accounting services provider was removed from direct personnel costs and charged to indirect costs. • After the above revisions were made, the auditor assisted management in reallocating payroll costs across all federal and nonfederal programs and to indirect costs in a reasonable, consistent and uniform manner. • Allowable payroll taxes, benefits and other employee related expense charges were estimated using the actual percentage of these expenses as a percentage of total allowable payroll costs. • Non-allocable direct costs were charged to the program at the actual amount of those costs incurred. • Allocable direct costs charges were estimated by allocating those costs to the federal program on the basis of allowable payroll costs charged to program as a percentage of total allowable payroll costs (percentage of payroll methodology). This methodology is in compliance with the requirements of 2 CFR 200.405 and appears to produce a result that reasonably estimates the proportional benefit of these costs to all federal and non-federal programs, and to indirect cost activities. • Indirect costs were estimated and charged to the program using the 10% de minimis indirect cost rate as defined in 2 CFR 200.414. Questioned Costs: Using the methodology described above, the auditor has estimated total federal expenditures allowable to the program of $247,119. However, AIRS has charged federal expenditures of $272,781 to the program. Therefore, the estimated questioned costs related to this program are $25,662. Repeat Finding from Prior Year: No Recommendation: Senior management and accounting personnel should create procedures to ensure that direct program costs are charged at the actual amounts incurred, develop a payroll cost allocation methodology, and an allocable direct cost allocation methodology that ensures that costs are reasonably, consistently and uniformly charged to and across all federal and non-federal programs and to indirect costs relative to the proportional benefit of those costs, and in compliance with the applicable federal cost principles in 2 CFR, Part 200, Subpart E. Management and the board should consider providing senior management, accounting personnel and applicable program personnel additional training and education related to the proper application of and compliance with the federal costs principles as defined in 2 CFR, Part 200, Subpart E. Management and the board may also want to consider engaging a third-party CPA or other accounting professional who has extensive prior skills, knowledge and experience related to Uniform Guidance and federal cost principles. Views of Responsible Officials: Management concurs with this audit finding.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
Federal Agency: U.S. Department of Interior Federal Program Name: National Park Service Conservation, Protection, Outreach, and Education (POE) Research and Development Cluster (RDC) Assistance Listing Number: 15.954 (POE) 15.608 and 15.945 (RDC) Award Period: June 2020 through August 2024 (POE) September 2019 through January 2024 (RDC) Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: In accordance with 2 CFR 200.414 Indirect Costs, any nonfederal entity that does not have current negotiated rate and elects the 10% de minimis rate must be applied to modified total direct costs (MTDC) indefinitely and in accordance with 2 CFR 200 UG, costs of compensation are allowable to the extent that they satisfy the specific requirements of the UG, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the nonfederal entity consistently applied to both federal and nonfederal activities; (2) Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and (3) Is determined and supported as provided in accordance with the UG, Standards for Documentation of Personnel Expenses, when applicable. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv) Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v) Comply with the established accounting policies and practices of the nonfederal entity; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and nonfederal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition/Context: We noted instances where an indirect rate of 17.5 percent was charged to federal awards instead of the 10 percent de minimis rate approved in the budgets. Additionally, we were unable to obtain evidence of federal approval of a 1.8 percent administration fee charged to gross wages as follows: • POE & RDC - For 4 of the 4 months tested, 17.5 percent of indirect rate was charged to various awards instead of the 10 percent de minimis rate. • POE - For 12 of the 36 items tested, we noted a 1.8 percent administration fee charged to gross wages. • RDC - For 22 of the 22 items tested, we noted a 1.8 percent administration fee charged to gross wages. Questioned Costs: None greater than $25,000 per major program. Cause: Not aware of the requirements. Effect: Failure to comply with 2 CFR 200 can lead to improper payments charged to programs. Repeat Finding: No Recommendation: We recommend management incorporate review control procedures to ensure the 10 percent de minimis rate is properly applied in accordance with UG and ensure appropriate costs are charged to the awards consistent with their federally approved budgets. Views of Responsible Officials: There is no disagreement with the audit finding. See corrective action plan.
2021-003 – ALLOWABLE COSTS/COST PRINCIPLES-PAYROLL DOCUMENTATION (Continued) Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. (3) In accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR part 516), charges for the salaries and wages of nonexempt employees, in addition to the supporting documentation described in this section, must also be supported by records indicating the total number of hours worked each day. 2 CFR 200.313 stipulates the identification with the Federal award rather than the nature of the goods and services involved is the determining factor in distinguishing direct from indirect (F&A) costs of Federal awards. Typical costs charged directly to a Federal award are the compensation of employees who work on that award, their related fringe benefit costs, the costs of materials and other items of expense incurred for the Federal award. If directly related to a specific award, certain costs that otherwise would be treated as indirect costs may also be considered direct costs. 2 CFR 200.414 stipulates that because of the diverse characteristics and accounting practices of nonprofit organizations, it is not possible to specify the types of cost which may be classified as indirect (F&A) cost in all situations. Identification with a Federal award rather than the nature of the goods and services involved is the determining factor in distinguishing direct from indirect (F&A) costs of Federal awards. However, typical examples of indirect (F&A) cost for many nonprofit organizations may 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. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued) 2021-003 – ALLOWABLE COSTS/COST PRINCIPLES-PAYROLL DOCUMENTATION (Continued) Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 Condition: All employees paid with federal funds are paid a fixed salary pursuant to an employment contract established prior to the calendar year. Estimates for salaries were made prior to the services being performed. However, there was a lack of documentation, which substantiates that the payroll charged was accurate, allowable and properly allocated. Furthermore, there was no documentation of days or hours worked per day in accordance with federal guidelines. Officials recorded all personnel costs as indirect (which is consistent with the treatment of these expenses in prior years) expenses. However, the budget award document indicates a large portion of personnel costs to be classified as direct charges. Questioned Costs: Unknown. Context: Salaries and related fringe benefits of $576,127 were expended under the federal award. Total federal expenditures listed on the Schedule of Federal Awards was $6,267,848. Cause: Internal controls and procedures related to the payroll documentation were not effectively designed or performed. Effect: National Center for the Advancement of STEM Education, Inc. is not in compliance with the documentation requirements related to salaries and wages. Recommendation: We recommend that management implement policies and procedures to ensure that documentation of salaries and wages are maintained in a manner consistent with federal requirements. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the finding.
Finding Number: 2021-005; Finding Type: Federal award finding; Federal Assistance Listing No.: 93.665; Pro-gram Name: COVID -19 Emergency Grants to Address Mental and Substance Use Disorders During COVID-19; Federal Agency: U.S. Department of Health and Human Services; Pass-Through Entity: Oregon Health Authority; Grant Number: 167045; Federal Award Year: 2021; Control Deficiency Type: Significant deficiency in internal controls over compliance; Instance of Noncompliance: Yes; Compliance Requirement: Subrecipient monitoring; Questioned Costs: None; Repeat Finding: No; Criteria: In accordance with the requirements of 2 CFR §200.332, a pass-through entity must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all the required information at the time of the subaward so that federal award is used in accordance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Coalition did not include all of the required information in the subawards granted to subre-cipients. Information missing from the subaward grant agreements includes the following: Subrecipient unique entity identifier; Federal award date; Total amount of federal funds obligated to subrecipient including the current award; Name of federal awarding agency, pass-through entity, and contact information for awarding official of the pass-through entity; Assistance listings number; the pass through entity must identify the dollar amount made available under each federal award and the Assistance Listings Number at the time of disburse-ment; Indirect cost rate for the federal award (including if the de minimis rate is charged) per § 200.414; All requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in ac-cordance with federal statutes, regulations and the terms and conditions of the federal award. Cause: The coalition was unaware of the subaward requirements of CFR §200.332. Effect: The Coalition did not comply with CFR §200.332. Audit Recommendation: We recommend that management implement procedures to ensure that all subawards contain the information required by CFR §200.332. Management’s Response: The Coalition will ensure that all future federal subawards will contain the infor-mation required by CFR §200.332. All contracts, sub-grantees, and MOUs, will include information required.
Finding Number: 2021-001; Finding Type: Federal award finding and financial statement finding; Federal Assistance Listing No.: 16.556; Program Name: State Domestic Violence and Sexual Assault Coalitions; Federal Agency: U.S. Department of Justice; Pass-Through Entity: n/a; Grant Number: 2019-MU-AX-0017; 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: No; Criteria: According to 2 CFR §200.414, an organization that does not have a current federally-negotiated indirect cost rate may either negotiate a rate with the pass-through entity or elect to charge a de minimis rate of 10% of Modified Total Direct Cost (“MTDC”). An organization must use an equitable distribution base to allocate its indirect and administrative costs. An organization using total direct costs as a distribution base must modify the base to exclude capital expenditures and other distorting items, such as subcontracts or subawards for $25,000 or more, rental costs, tuition remission, scholarships and fellowships, and participant support costs, in accordance with 2 CFR §200.68. The organization should have controls in place to ensure that indirect costs are charged uniformly to both federally funded activities and other activities of the organization, and the allocation methodology results in an equitable allocation of indirect and shared administrative costs. Condition: The organization did not have a federally-negotiated indirect cost rate nor a negotiated rate with pass-through entities, and therefore, should have charged a de minimis rate of 10% of MTDC. Instead, the organization charged indirect costs using salary as an allocation base. Cause: The organization did not have a proper understanding of the Uniform Guidance regulations governing the expenditure of federal funds. Effect: The Coalition had to go back through the entire fiscal year and reallocate costs using the de minimis rate of 10% of MTDC. This resulted in adjustments to costs charged to Federal awards and other funding sources, and the related revenues recognized for cost reimbursement agreements. Audit Recommendation: We recommend the Coalition develop a cost allocation plan for recovering direct and indirect costs. The cost allocation plan should be consistently applied to ensure that costs charged to grants and contracts are reasonable, adequately supported and the allocation methodology provides for an equitable allocation of direct and indirect costs. Documentation of the expense allocations, including support for the underlying expenses being allocated, and the determination of the allocation percentages used should be reviewed by a supervisor and maintained by the Coalition. Management’s Response: The Coalition 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. The Coalition is developing a formal cost allocation plan for recovery of direct and indirect cost using the 10% de minimis of MTDC. The allocation will be applied on a monthly basis and be incorporated in the annual budgeting process.
Finding Number: 2021-005; Finding Type: Federal award finding; Federal Assistance Listing No.: 93.665; Pro-gram Name: COVID -19 Emergency Grants to Address Mental and Substance Use Disorders During COVID-19; Federal Agency: U.S. Department of Health and Human Services; Pass-Through Entity: Oregon Health Authority; Grant Number: 167045; Federal Award Year: 2021; Control Deficiency Type: Significant deficiency in internal controls over compliance; Instance of Noncompliance: Yes; Compliance Requirement: Subrecipient monitoring; Questioned Costs: None; Repeat Finding: No; Criteria: In accordance with the requirements of 2 CFR §200.332, a pass-through entity must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes all the required information at the time of the subaward so that federal award is used in accordance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Coalition did not include all of the required information in the subawards granted to subre-cipients. Information missing from the subaward grant agreements includes the following: Subrecipient unique entity identifier; Federal award date; Total amount of federal funds obligated to subrecipient including the current award; Name of federal awarding agency, pass-through entity, and contact information for awarding official of the pass-through entity; Assistance listings number; the pass through entity must identify the dollar amount made available under each federal award and the Assistance Listings Number at the time of disburse-ment; Indirect cost rate for the federal award (including if the de minimis rate is charged) per § 200.414; All requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in ac-cordance with federal statutes, regulations and the terms and conditions of the federal award. Cause: The coalition was unaware of the subaward requirements of CFR §200.332. Effect: The Coalition did not comply with CFR §200.332. Audit Recommendation: We recommend that management implement procedures to ensure that all subawards contain the information required by CFR §200.332. Management’s Response: The Coalition will ensure that all future federal subawards will contain the infor-mation required by CFR §200.332. All contracts, sub-grantees, and MOUs, will include information required.
Finding Number: 2021-001; Finding Type: Federal award finding and financial statement finding; Federal Assistance Listing No.: 16.556; Program Name: State Domestic Violence and Sexual Assault Coalitions; Federal Agency: U.S. Department of Justice; Pass-Through Entity: n/a; Grant Number: 2019-MU-AX-0017; 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: No; Criteria: According to 2 CFR §200.414, an organization that does not have a current federally-negotiated indirect cost rate may either negotiate a rate with the pass-through entity or elect to charge a de minimis rate of 10% of Modified Total Direct Cost (“MTDC”). An organization must use an equitable distribution base to allocate its indirect and administrative costs. An organization using total direct costs as a distribution base must modify the base to exclude capital expenditures and other distorting items, such as subcontracts or subawards for $25,000 or more, rental costs, tuition remission, scholarships and fellowships, and participant support costs, in accordance with 2 CFR §200.68. The organization should have controls in place to ensure that indirect costs are charged uniformly to both federally funded activities and other activities of the organization, and the allocation methodology results in an equitable allocation of indirect and shared administrative costs. Condition: The organization did not have a federally-negotiated indirect cost rate nor a negotiated rate with pass-through entities, and therefore, should have charged a de minimis rate of 10% of MTDC. Instead, the organization charged indirect costs using salary as an allocation base. Cause: The organization did not have a proper understanding of the Uniform Guidance regulations governing the expenditure of federal funds. Effect: The Coalition had to go back through the entire fiscal year and reallocate costs using the de minimis rate of 10% of MTDC. This resulted in adjustments to costs charged to Federal awards and other funding sources, and the related revenues recognized for cost reimbursement agreements. Audit Recommendation: We recommend the Coalition develop a cost allocation plan for recovering direct and indirect costs. The cost allocation plan should be consistently applied to ensure that costs charged to grants and contracts are reasonable, adequately supported and the allocation methodology provides for an equitable allocation of direct and indirect costs. Documentation of the expense allocations, including support for the underlying expenses being allocated, and the determination of the allocation percentages used should be reviewed by a supervisor and maintained by the Coalition. Management’s Response: The Coalition 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. The Coalition is developing a formal cost allocation plan for recovery of direct and indirect cost using the 10% de minimis of MTDC. The allocation will be applied on a monthly basis and be incorporated in the annual budgeting process.
2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not pinion over the major federal programs’ compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help
2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not pinion over the major federal programs’ compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help
2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not pinion over the major federal programs’ compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help
2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not pinion over the major federal programs’ compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help
Reference Number: 2021-007 Category of Finding: Subrecipient Monitoring Type of Finding: Significant Deficiency and Instance of Noncompliance State Administering Department: California Business, Consumer Services, and Housing Agency California Department of Education California Department of Social Services Federal Program Title: Coronavirus Relief Fund Assistance Listing Number: 21.019 Federal Award Number and Year: N/A; 2020 Criteria Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. §200.332 Requirements for pass-through entities (2 CFR 200.332): 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 date elements change, include the changes in subsequent subaward modification. When some of the 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; (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 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; Condition For 2 of 60 subawards tested, the State did not communicate required subaward information to its subrecipients of the Coronavirus Relief Fund (CRF) program at the time of the subaward, or when the State became aware of changes in subaward information, including identification that the subaward funds represented federal funding. Also, for 4 of 60 direct costs tested, the transactions were subsequently determined to be subawards, for which the required subaward information was not properly communicated to the subrecipients. The 4 direct costs transactions were from the Business, Consumer Services and Housing Agency; 1 of the subawards was from the California Department of Education; and 1 of the subawards was from the California Department of Social Services. Identification as a Repeat Finding This was not a repeat finding from the immediate prior year. Cause The State initially appropriated state General Fund dollars to various departments through an amendment to the 2019 State Budget Act for its coronavirus response. The initial communication to certain subrecipients identified the funding source as State General Fund monies. Subsequently, upon the State allocating its CRF award funds to be administered by various state departments, certain activities and related costs originally funded by the State General Fund, were replaced with CRF funding. Given the change in the source of funding, updated communication was not provided to the subrecipients informing them of the required federal award information. Additionally, the State did not make timely determinations identifying certain activities as subawards versus contracts for goods and/or services. Effect By not properly informing subrecipients that the funding provided represented federal financial assistance associated with the CRF program, there is an increased risk that subrecipients could potentially expend funds on ineligible activities, as well as subrecipients not accounting and reporting expenditures in accordance with the Federal statutes, regulations, and the terms and conditions of the federal award. Questioned Costs No questioned costs were identified. Context Disbursements to subrecipients for the CRF totaled $7,480,270,598, or 79.7% of total reported CRF program expenditures. Subrecipient expenditures for the 6 subawards with exceptions, the related State administering department, and the total department subrecipient expenditures for which the required subaward information was not communicated, is as follows: "See the Notes to the SEFA for the chart/table" The sample was not a statistically valid sample. Recommendation The state administering departments identified above should review all subawards provided which were funded using CRF program funds, provide the subrecipients with subaward information required by 2 CFR 200.332(a), and determine whether the subrecipients properly reported CRF subawards and related expenditures in their respective schedule of expenditures of federal awards pursuant to 2 CFR 200.502.If federal subawards were not reported, the state administering departments should perform appropriate follow-up monitoring procedures. Views of Responsible Officials and Corrective Action Plan Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.
2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the College’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the Schedule must: (1) List individual federal programs by Federal agency. (2) For federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total federal awards expended for each individual federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each federal program. (5) For loan or loan guarantee programs described in § 200.502 basis for determining federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the Schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The College’s internal control procedures did not identify $839,935 of expenses in the Schedule of Expenditures of Federal Awards related to the CARES Act grant. Adjustments, to which management have agreed, are reflected in the accompanying Schedule. We recommend that management continue to analyze the federal revenues and expenditures and include them in the proper period for audit.
2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the College’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the Schedule must: (1) List individual federal programs by Federal agency. (2) For federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total federal awards expended for each individual federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each federal program. (5) For loan or loan guarantee programs described in § 200.502 basis for determining federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the Schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The College’s internal control procedures did not identify $839,935 of expenses in the Schedule of Expenditures of Federal Awards related to the CARES Act grant. Adjustments, to which management have agreed, are reflected in the accompanying Schedule. We recommend that management continue to analyze the federal revenues and expenditures and include them in the proper period for audit.
2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not pinion over the major federal programs’ compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help
2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not pinion over the major federal programs’ compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help
2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not pinion over the major federal programs’ compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help
2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not pinion over the major federal programs’ compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help
Reference Number: 2021-007 Category of Finding: Subrecipient Monitoring Type of Finding: Significant Deficiency and Instance of Noncompliance State Administering Department: California Business, Consumer Services, and Housing Agency California Department of Education California Department of Social Services Federal Program Title: Coronavirus Relief Fund Assistance Listing Number: 21.019 Federal Award Number and Year: N/A; 2020 Criteria Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. §200.332 Requirements for pass-through entities (2 CFR 200.332): 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 date elements change, include the changes in subsequent subaward modification. When some of the 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; (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 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; Condition For 2 of 60 subawards tested, the State did not communicate required subaward information to its subrecipients of the Coronavirus Relief Fund (CRF) program at the time of the subaward, or when the State became aware of changes in subaward information, including identification that the subaward funds represented federal funding. Also, for 4 of 60 direct costs tested, the transactions were subsequently determined to be subawards, for which the required subaward information was not properly communicated to the subrecipients. The 4 direct costs transactions were from the Business, Consumer Services and Housing Agency; 1 of the subawards was from the California Department of Education; and 1 of the subawards was from the California Department of Social Services. Identification as a Repeat Finding This was not a repeat finding from the immediate prior year. Cause The State initially appropriated state General Fund dollars to various departments through an amendment to the 2019 State Budget Act for its coronavirus response. The initial communication to certain subrecipients identified the funding source as State General Fund monies. Subsequently, upon the State allocating its CRF award funds to be administered by various state departments, certain activities and related costs originally funded by the State General Fund, were replaced with CRF funding. Given the change in the source of funding, updated communication was not provided to the subrecipients informing them of the required federal award information. Additionally, the State did not make timely determinations identifying certain activities as subawards versus contracts for goods and/or services. Effect By not properly informing subrecipients that the funding provided represented federal financial assistance associated with the CRF program, there is an increased risk that subrecipients could potentially expend funds on ineligible activities, as well as subrecipients not accounting and reporting expenditures in accordance with the Federal statutes, regulations, and the terms and conditions of the federal award. Questioned Costs No questioned costs were identified. Context Disbursements to subrecipients for the CRF totaled $7,480,270,598, or 79.7% of total reported CRF program expenditures. Subrecipient expenditures for the 6 subawards with exceptions, the related State administering department, and the total department subrecipient expenditures for which the required subaward information was not communicated, is as follows: "See the Notes to the SEFA for the chart/table" The sample was not a statistically valid sample. Recommendation The state administering departments identified above should review all subawards provided which were funded using CRF program funds, provide the subrecipients with subaward information required by 2 CFR 200.332(a), and determine whether the subrecipients properly reported CRF subawards and related expenditures in their respective schedule of expenditures of federal awards pursuant to 2 CFR 200.502.If federal subawards were not reported, the state administering departments should perform appropriate follow-up monitoring procedures. Views of Responsible Officials and Corrective Action Plan Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.
2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the College’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the Schedule must: (1) List individual federal programs by Federal agency. (2) For federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total federal awards expended for each individual federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each federal program. (5) For loan or loan guarantee programs described in § 200.502 basis for determining federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the Schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The College’s internal control procedures did not identify $839,935 of expenses in the Schedule of Expenditures of Federal Awards related to the CARES Act grant. Adjustments, to which management have agreed, are reflected in the accompanying Schedule. We recommend that management continue to analyze the federal revenues and expenditures and include them in the proper period for audit.
2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the College’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the Schedule must: (1) List individual federal programs by Federal agency. (2) For federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total federal awards expended for each individual federal program and the ALN number or other identifying number when the ALN information is not available. (4) Include the total amount provided to subrecipients from each federal program. (5) For loan or loan guarantee programs described in § 200.502 basis for determining federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the Schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The College’s internal control procedures did not identify $839,935 of expenses in the Schedule of Expenditures of Federal Awards related to the CARES Act grant. Adjustments, to which management have agreed, are reflected in the accompanying Schedule. We recommend that management continue to analyze the federal revenues and expenditures and include them in the proper period for audit.
2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not pinion over the major federal programs’ compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help