Program: AL 15.611 – Wildlife Restoration and Basic Hunter Education and Safety – Allowability & Subrecipient Monitoring Grant Number & Year: F22AF01344-00, July 1, 2022, through June 30, 2025 Federal Grantor Agency: U.S. Department of the Interior Criteria: For the Wildlife Restoration program, Title 50 CFR § 80.50(a)(6)(iii) (October 1, 2023) states, in part, “Grantees and subgrantees must follow the requirements at 2 CFR part 200 when acquiring equipment, goods, and services under an award[.]” 2 CFR § 200.332(d) (January 1, 2024) requires a pass-through entity to do the following: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward[.] 2 CFR § 200.403 (January 1, 2024) requires costs to be necessary, reasonable, and adequately documented. 2 CFR § 200.430(i) (January 1, 2024) provides the following, in relevant part: (1) 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 non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE’s definition of IBS); * * * * (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 non-Federal 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. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: * * * * (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. 2 CFR § 200.431(b) (January 1, 2024) states, in relevant part: The cost of fringe benefits in the form of regular compensation paid to employees during periods of authorized absences from the job, such as for annual leave, family-related leave, sick leave, holidays, court leave, military leave, administrative leave, and other similar benefits, are allowable if all of the following criteria are met: (1) They are provided under established written leave policies; (2) The costs are equitably allocated to all related activities, including Federal awards; and, (3) The accounting basis (cash or accrual) selected for costing each type of leave is consistently followed by the non-Federal entity or specified grouping of employees. (i) When a non-Federal entity uses the cash basis of accounting, the cost of leave is recognized in the period that the leave is taken and paid for. Payments for unused leave when an employee retires or terminates employment are allowable in the year of payment. (ii) The accrual basis may be only used for those types of leave for which a liability as defined by GAAP exists when the leave is earned. When a non-Federal entity uses the accrual basis of accounting, allowable leave costs are the lesser of the amount accrued or funded. 2 CFR § 200.431(c) (January 1, 2024) states the following: The cost of fringe benefits in the form of employer contributions or expenses for social security; employee life, health, unemployment, and worker’s compensation insurance (except as indicated in §200.447); pension plan costs (see paragraph (i) of this section); and other similar benefits are allowable, provided such benefits are granted under established written policies. Such benefits, must be allocated to Federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals or group(s) of employees whose salaries and wages are chargeable to such Federal awards and other activities, and charged as direct or indirect costs in accordance with the non-Federal entity’s accounting practices. A good internal control plan requires procedures to ensure that salaries and wages, as well as other costs charged to subawards, are documented properly. Condition: Adequate documentation was not on file to support a payment to a subrecipient. Repeat Finding: No Questioned Costs: $1,697 known Statistical Sample: No Context: We randomly selected 16 non-payroll documents to test. Our sample population included operating expenditures, capital outlay expenditures, and subrecipient reimbursements. One of 16 documents tested lacked adequate documentation to support that the costs were in accordance with Federal cost principles. The Agency paid $17,268 to a subrecipient that submitted an invoice for lodging and travel costs, payroll, and indirect costs for one employee. The employee’s base rate of $35.82 per hour for 378.5 hours worked on the grant was calculated according to the following: a pay rate of $24.76 per hour; a charge of 18% for paid time off; 22.6% for employer taxes and benefits; and 26.2% for indirect costs. However, the subrecipient provided no documentation, such as payroll records or bank statements, to support the payroll costs, totaling $17,110. After the APA requested support, the Agency provided paystubs and detailed payroll records from the subrecipient’s accounting system; however, based on the support provided, the wages, benefits, taxes, and indirect costs allocable to the grant totaled $15,413. As a result, we questioned the variance of $1,697 between the support provided and the amount charged to the grant for the payroll costs. Federal payment errors noted for the sample tested were $1,697. The total Federal sample tested was $300,860, and the total sample population was $10,649,122. Based on the sample tested, the case error rate was 6.25% (1/16). The dollar error rate was 0.56% ($1,697/$300,860), which estimates the potential dollars at risk for fiscal year 2024 to be $59,635 (dollar error rate multiplied by the population). Cause: Inadequate subrecipient monitoring procedures. Effect: Without adequate subrecipient monitoring procedures and supporting documentation on file, there is an increased risk for not only misuse of Federal funds but also payments not complying with State and Federal requirements. Recommendation: We recommend the Agency improve subrecipient monitoring to ensure both the allowability of costs and adherence to Federal regulations. Management Response: NGPC disagrees with the questioned costs identified by the APA. Our subrecipient policy includes the ability to ask for detailed records for any expense at any time. Accounting records, invoices, and paystubs were provided to substantiate the total invoice amount. The subrecipient has been audited and there were no issues with their financial systems. Explanations and calculations were provided to include the benefits and taxes paid out by the subrecipient, which matched the accounting records. Per their latest audit, these expenses are allocated on the basis of time and effort which complies with 2 CFR § 200.431(c). Performance reports were received and activity monitored by NGPC staff. NGPC works closely with the subrecipient which is considered a low-risk entity as demonstrated by the information provided for the audit. APA Response: Documentation provided to the auditors was inadequate to support the full amount charged to the grant. Documentation was not provided to support that the paid time off charged to the grant was reasonable, and no support was provided for Federal and State unemployment taxes, workers’ compensation costs, retirement plan fees, and other benefit costs.
Program: AL 15.611 – Wildlife Restoration and Basic Hunter Education and Safety – Allowability & Subrecipient Monitoring Grant Number & Year: F22AF01344-00, July 1, 2022, through June 30, 2025 Federal Grantor Agency: U.S. Department of the Interior Criteria: For the Wildlife Restoration program, Title 50 CFR § 80.50(a)(6)(iii) (October 1, 2023) states, in part, “Grantees and subgrantees must follow the requirements at 2 CFR part 200 when acquiring equipment, goods, and services under an award[.]” 2 CFR § 200.332(d) (January 1, 2024) requires a pass-through entity to do the following: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward[.] 2 CFR § 200.403 (January 1, 2024) requires costs to be necessary, reasonable, and adequately documented. 2 CFR § 200.430(i) (January 1, 2024) provides the following, in relevant part: (1) 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 non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE’s definition of IBS); * * * * (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 non-Federal 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. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: * * * * (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. 2 CFR § 200.431(b) (January 1, 2024) states, in relevant part: The cost of fringe benefits in the form of regular compensation paid to employees during periods of authorized absences from the job, such as for annual leave, family-related leave, sick leave, holidays, court leave, military leave, administrative leave, and other similar benefits, are allowable if all of the following criteria are met: (1) They are provided under established written leave policies; (2) The costs are equitably allocated to all related activities, including Federal awards; and, (3) The accounting basis (cash or accrual) selected for costing each type of leave is consistently followed by the non-Federal entity or specified grouping of employees. (i) When a non-Federal entity uses the cash basis of accounting, the cost of leave is recognized in the period that the leave is taken and paid for. Payments for unused leave when an employee retires or terminates employment are allowable in the year of payment. (ii) The accrual basis may be only used for those types of leave for which a liability as defined by GAAP exists when the leave is earned. When a non-Federal entity uses the accrual basis of accounting, allowable leave costs are the lesser of the amount accrued or funded. 2 CFR § 200.431(c) (January 1, 2024) states the following: The cost of fringe benefits in the form of employer contributions or expenses for social security; employee life, health, unemployment, and worker’s compensation insurance (except as indicated in §200.447); pension plan costs (see paragraph (i) of this section); and other similar benefits are allowable, provided such benefits are granted under established written policies. Such benefits, must be allocated to Federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals or group(s) of employees whose salaries and wages are chargeable to such Federal awards and other activities, and charged as direct or indirect costs in accordance with the non-Federal entity’s accounting practices. A good internal control plan requires procedures to ensure that salaries and wages, as well as other costs charged to subawards, are documented properly. Condition: Adequate documentation was not on file to support a payment to a subrecipient. Repeat Finding: No Questioned Costs: $1,697 known Statistical Sample: No Context: We randomly selected 16 non-payroll documents to test. Our sample population included operating expenditures, capital outlay expenditures, and subrecipient reimbursements. One of 16 documents tested lacked adequate documentation to support that the costs were in accordance with Federal cost principles. The Agency paid $17,268 to a subrecipient that submitted an invoice for lodging and travel costs, payroll, and indirect costs for one employee. The employee’s base rate of $35.82 per hour for 378.5 hours worked on the grant was calculated according to the following: a pay rate of $24.76 per hour; a charge of 18% for paid time off; 22.6% for employer taxes and benefits; and 26.2% for indirect costs. However, the subrecipient provided no documentation, such as payroll records or bank statements, to support the payroll costs, totaling $17,110. After the APA requested support, the Agency provided paystubs and detailed payroll records from the subrecipient’s accounting system; however, based on the support provided, the wages, benefits, taxes, and indirect costs allocable to the grant totaled $15,413. As a result, we questioned the variance of $1,697 between the support provided and the amount charged to the grant for the payroll costs. Federal payment errors noted for the sample tested were $1,697. The total Federal sample tested was $300,860, and the total sample population was $10,649,122. Based on the sample tested, the case error rate was 6.25% (1/16). The dollar error rate was 0.56% ($1,697/$300,860), which estimates the potential dollars at risk for fiscal year 2024 to be $59,635 (dollar error rate multiplied by the population). Cause: Inadequate subrecipient monitoring procedures. Effect: Without adequate subrecipient monitoring procedures and supporting documentation on file, there is an increased risk for not only misuse of Federal funds but also payments not complying with State and Federal requirements. Recommendation: We recommend the Agency improve subrecipient monitoring to ensure both the allowability of costs and adherence to Federal regulations. Management Response: NGPC disagrees with the questioned costs identified by the APA. Our subrecipient policy includes the ability to ask for detailed records for any expense at any time. Accounting records, invoices, and paystubs were provided to substantiate the total invoice amount. The subrecipient has been audited and there were no issues with their financial systems. Explanations and calculations were provided to include the benefits and taxes paid out by the subrecipient, which matched the accounting records. Per their latest audit, these expenses are allocated on the basis of time and effort which complies with 2 CFR § 200.431(c). Performance reports were received and activity monitored by NGPC staff. NGPC works closely with the subrecipient which is considered a low-risk entity as demonstrated by the information provided for the audit. APA Response: Documentation provided to the auditors was inadequate to support the full amount charged to the grant. Documentation was not provided to support that the paid time off charged to the grant was reasonable, and no support was provided for Federal and State unemployment taxes, workers’ compensation costs, retirement plan fees, and other benefit costs.
Activities Allowed or Unallowed; Allowable Costs/Cost Principles Federal Award Identification Assistance Listing Program Title: Formula Grants for Rural Areas Assistance Listing Program Number: 20.509 Federal Award ID Number and Year: Various Federal Agency: U.S. Department of Transportation Pass-Through Entity: Nebraska Department of Transportation Criteria The Organization must establish and maintain effective internal control over the Federal award that provides reasonable assurance that they are managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award (2 CFR 200.303). Costs must be adequately documented (2 CFR 200.403(g)). Insurance refunds must be credited against insurance costs in the year the refund is received (2 CFR 200.447(e)). Condition The Organization lacked adequate documentation to support: - That certain expenditures followed an approval process before being paid. - That certain expenditures were for allowable activities and in accordance with allowable cost principles. Repeat Finding Yes: 2022-004. Cause Procedures within the Organization were inadequate to ensure that expenditures follow a review and approval process prior to being paid, that costs were in accordance with Federal requirements and that only costs which had been paid for were requested for reimbursement. Effect or Potential Effect Increased potential for errors or misuse of funds. Questioned Costs Known $20,547 Statistical Sample No. Context During the fiscal year, the Organization requested a monthly reimbursement from the pass-through entity. Auditor selected three of these monthly reimbursement requests (August 2022, October 2022, and March 2023) for testing, reviewing all non-payrollrelated expenses, resulting in testing approximately 290 different line items composing many more individual transactions. Within this sample, auditor noted: - Multiple instances where no documentation existed to support a system of internal control whereby expenditures were approved by a competent individual prior to their being paid. - One instance of a transposition error between the fuel summary report and the reimbursement request, where the amounts in the reimbursement request listed the number of gallons of fuel as opposed to the cost of the fuel, resulting in the Organization receiving a smaller reimbursement than what it was eligible for of $1,111. - In two of the months selected for testing, the fuel costs for the same five vehicles in both months were excluded from the reimbursement request, resulting in the Organization receiving a smaller reimbursement than what it was eligible for of $15,539. The vehicle VINs are *7081, *2676, *2427, *4288, and *2962. - The fuel reimbursement summary for October 2022 for VIN *9460 shows regular fill-ups in gallons exceeding the fuel tank capacity for this vehicle. - The fuel reimbursement summary for October 2022 shows multiple vehicles (VINs *5418, *5421, *4450, and *1256) that received fill-ups of both diesel fuel and regular unleaded 10% ethanol gasoline. It is the auditor’s understanding that this is not recommended for vehicles. - Multiple instances where the available supporting documentation was incomplete, resulting in questioned costs of $20,547. - Multiple instances where documentation provided did not include sufficient detail to determine if products and/or services provided meet the definition of allowable activity, or to determine if insurance coverages were for assets owned by the Organization. - One expenditure for which reimbursement was requested in August 2022 and again in September 2022 amounting to $17,951. This duplicate reimbursement was corrected in the March 2023 reimbursement request. - Multiple instances of expenditure misclassification in violation of the invoicing and documentation guidelines issued by the pass-through entity, resulting in no additional questioned costs. - Multiple instances where the expenditure appears to be for a vehicle owned by the Organization, however, the supporting documentation shows the service is for a different vehicle than that noted on the reimbursement request. - Auditor was unable to determine if insurance refunds received were credited against insurance costs. Recommendation We recommend the Organization establish a system of internal control consisting of policies and procedures whereby all expenditures are properly explained with supporting documentation and are reviewed and approved prior to payment. Additionally, that only those expenditures which have been paid for are requested for reimbursement. Views of Responsible Officials See Corrective Action Plan, below.
Activities Allowed or Unallowed; Allowable Costs/Cost Principles Federal Award Identification Assistance Listing Program Title: Formula Grants for Rural Areas Assistance Listing Program Number: 20.509 Federal Award ID Number and Year: Various Federal Agency: U.S. Department of Transportation Pass-Through Entity: Nebraska Department of Transportation Criteria The Organization must establish and maintain effective internal control over the Federal award that provides reasonable assurance that they are managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award (2 CFR 200.303). Costs must be adequately documented (2 CFR 200.403(g)). Insurance refunds must be credited against insurance costs in the year the refund is received (2 CFR 200.447(e)). Condition The Organization lacked adequate documentation to support: - That certain expenditures followed an approval process before being paid. - That certain expenditures were for allowable activities and in accordance with allowable cost principles. Repeat Finding Yes: 2022-004. Cause Procedures within the Organization were inadequate to ensure that expenditures follow a review and approval process prior to being paid, that costs were in accordance with Federal requirements and that only costs which had been paid for were requested for reimbursement. Effect or Potential Effect Increased potential for errors or misuse of funds. Questioned Costs Known $20,547 Statistical Sample No. Context During the fiscal year, the Organization requested a monthly reimbursement from the pass-through entity. Auditor selected three of these monthly reimbursement requests (August 2022, October 2022, and March 2023) for testing, reviewing all non-payrollrelated expenses, resulting in testing approximately 290 different line items composing many more individual transactions. Within this sample, auditor noted: - Multiple instances where no documentation existed to support a system of internal control whereby expenditures were approved by a competent individual prior to their being paid. - One instance of a transposition error between the fuel summary report and the reimbursement request, where the amounts in the reimbursement request listed the number of gallons of fuel as opposed to the cost of the fuel, resulting in the Organization receiving a smaller reimbursement than what it was eligible for of $1,111. - In two of the months selected for testing, the fuel costs for the same five vehicles in both months were excluded from the reimbursement request, resulting in the Organization receiving a smaller reimbursement than what it was eligible for of $15,539. The vehicle VINs are *7081, *2676, *2427, *4288, and *2962. - The fuel reimbursement summary for October 2022 for VIN *9460 shows regular fill-ups in gallons exceeding the fuel tank capacity for this vehicle. - The fuel reimbursement summary for October 2022 shows multiple vehicles (VINs *5418, *5421, *4450, and *1256) that received fill-ups of both diesel fuel and regular unleaded 10% ethanol gasoline. It is the auditor’s understanding that this is not recommended for vehicles. - Multiple instances where the available supporting documentation was incomplete, resulting in questioned costs of $20,547. - Multiple instances where documentation provided did not include sufficient detail to determine if products and/or services provided meet the definition of allowable activity, or to determine if insurance coverages were for assets owned by the Organization. - One expenditure for which reimbursement was requested in August 2022 and again in September 2022 amounting to $17,951. This duplicate reimbursement was corrected in the March 2023 reimbursement request. - Multiple instances of expenditure misclassification in violation of the invoicing and documentation guidelines issued by the pass-through entity, resulting in no additional questioned costs. - Multiple instances where the expenditure appears to be for a vehicle owned by the Organization, however, the supporting documentation shows the service is for a different vehicle than that noted on the reimbursement request. - Auditor was unable to determine if insurance refunds received were credited against insurance costs. Recommendation We recommend the Organization establish a system of internal control consisting of policies and procedures whereby all expenditures are properly explained with supporting documentation and are reviewed and approved prior to payment. Additionally, that only those expenditures which have been paid for are requested for reimbursement. Views of Responsible Officials See Corrective Action Plan, below.
Federal Agencies: Department of Health and Human Services Federal Assistance Listing Numbers: 93.110 Program: Maternal and Child Health Federal Consolidated Programs Pass-Through Entity Identifying Numbers: N/A Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.431 - Compensation - Fringe Benefits: ?The cost of fringe benefits in the form of employer contributions or expenses for social security; employee life, health, unemployment, and worker's compensation insurance (except as indicated in ? 200.447); pension plan costs (see paragraph (i) of this section); and other similar benefits are allowable, provided such benefits are granted under established written policies. Such benefits, must be allocated to Federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals or group(s) of employees whose salaries and wages are chargeable to such Federal awards and other activities, and charged as direct or indirect costs in accordance with the non-Federal entity's accounting practices.? Per 2 CFR Section 200.430 - Compensation ? Personnel Services: ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (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 non-Federal 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. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: a. The system for establishing the estimates produces reasonable approximations of the activity actually performed. b. Significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 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.? In addition, per 2 CFR Section 200.403 regarding all direct costs: ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.? Condition: We noted that Safe & Sound allocated fringe benefits during 2022 based on a flat percentage of salaries charged to the grant based on a methodology determined during the budget making process. The methodology was isolated to charges of fringe benefits. In addition, shared costs (e.g., insurance and occupancy) during 2022 were charged on a monthly basis as one twelfth of the total budgeted amount for the year. The methodology was isolated to certain shared costs. Safe & Sound does not have a process in place to true-up certain costs charged based on budget during interim periods to actual amounts. Context: Total fringe benefits charged to the grant were $38,534. Total shared costs charged to the grant were $16,536. Cause: Safe & Sound did not have policies and procedures in place to review and reconcile the budgeted amounts of fringe benefits or shared costs charged to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted totals are reasonable and reconcile to the actual time spent on the program, Safe & Sound could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement. Safe & Sound is entitled to under the terms of the grant. Questioned Costs: $55,070 Identification as a Repeat Finding: Not Applicable. Recommendation: We recommend that Safe & Sound implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR 200.430. In addition, we recommend training be provided to staff on requirements of their federal grants. Views of Responsible Officials: Management agrees with the finding. Management will implement policies and procedures to ensure a true up between budget and actual is completed and ensure all actuals are properly supported.
Federal Agencies: Department of Health and Human Services Federal Assistance Listing Numbers: 93.110 Program: Maternal and Child Health Federal Consolidated Programs Pass-Through Entity Identifying Numbers: N/A Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.431 - Compensation - Fringe Benefits: ?The cost of fringe benefits in the form of employer contributions or expenses for social security; employee life, health, unemployment, and worker's compensation insurance (except as indicated in ? 200.447); pension plan costs (see paragraph (i) of this section); and other similar benefits are allowable, provided such benefits are granted under established written policies. Such benefits, must be allocated to Federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals or group(s) of employees whose salaries and wages are chargeable to such Federal awards and other activities, and charged as direct or indirect costs in accordance with the non-Federal entity's accounting practices.? Per 2 CFR Section 200.430 - Compensation ? Personnel Services: ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (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 non-Federal 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. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: a. The system for establishing the estimates produces reasonable approximations of the activity actually performed. b. Significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 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.? In addition, per 2 CFR Section 200.403 regarding all direct costs: ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.? Condition: We noted that Safe & Sound allocated fringe benefits during 2022 based on a flat percentage of salaries charged to the grant based on a methodology determined during the budget making process. The methodology was isolated to charges of fringe benefits. In addition, shared costs (e.g., insurance and occupancy) during 2022 were charged on a monthly basis as one twelfth of the total budgeted amount for the year. The methodology was isolated to certain shared costs. Safe & Sound does not have a process in place to true-up certain costs charged based on budget during interim periods to actual amounts. Context: Total fringe benefits charged to the grant were $38,534. Total shared costs charged to the grant were $16,536. Cause: Safe & Sound did not have policies and procedures in place to review and reconcile the budgeted amounts of fringe benefits or shared costs charged to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted totals are reasonable and reconcile to the actual time spent on the program, Safe & Sound could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement. Safe & Sound is entitled to under the terms of the grant. Questioned Costs: $55,070 Identification as a Repeat Finding: Not Applicable. Recommendation: We recommend that Safe & Sound implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR 200.430. In addition, we recommend training be provided to staff on requirements of their federal grants. Views of Responsible Officials: Management agrees with the finding. Management will implement policies and procedures to ensure a true up between budget and actual is completed and ensure all actuals are properly supported.
2022 ? 001 INSURANCE COVERAGE - ALLOWABLE COSTS PRINCIPLES Criteria: 2 CFR ? 200.447 explains that costs which should have been covered by permissible insurance are unallowable. Condition: During our testing of the TANF program we found the District incurred a cost in the amount of $7,905 for hail damage that would have been covered by insurance if the damage had been reported to the insurance company in a timely manner. Cause: The District did not have a process in place to inspect vehicles on a regular basis nor were they aware that these costs were not allowable under the grant. Effect: Reimbursement for an unallowable cost under the grant was received. Questioned Cost: Less than $25,000, actual known cost of $7,905. Recommendation: We recommend that management develop a process to inspect vehicles on a regular basis. Furthermore, management should continue striving to more clearly understand federal cost principles.
2022 ? 001 INSURANCE COVERAGE - ALLOWABLE COSTS PRINCIPLES Criteria: 2 CFR ? 200.447 explains that costs which should have been covered by permissible insurance are unallowable. Condition: During our testing of the TANF program we found the District incurred a cost in the amount of $7,905 for hail damage that would have been covered by insurance if the damage had been reported to the insurance company in a timely manner. Cause: The District did not have a process in place to inspect vehicles on a regular basis nor were they aware that these costs were not allowable under the grant. Effect: Reimbursement for an unallowable cost under the grant was received. Questioned Cost: Less than $25,000, actual known cost of $7,905. Recommendation: We recommend that management develop a process to inspect vehicles on a regular basis. Furthermore, management should continue striving to more clearly understand federal cost principles.