2025-003 – Allowable Costs (Significant Deficiency) ______________________________________________________________________ Federal Program Information: Funding Agency: U.S. Department of Energy Title: Nuclear Energy Research, Development and Demonstration Assistance Listing Number: 81.121 Award Number: DE-NE0009334 and DE-NE0009328 Award Period: 09/29/2023-09/28/2025; 05/04/2023-05/03/2026 Criteria: In accordance with 2 CFR §200.403, except where otherwise authorized by statute, costs must meet the following criteria to be allowable under Federal awards: Be necessary and reasonable for the performance of the federal program. Be adequately documented. Conform to any limitations or exclusions set forth in the federal award. Further, 2 CFR §200.302(b)(3) the entity should maintain records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Additionally, 2 CFR §200.473 says that the cost of alcoholic beverages is unallowable. Condition: During our expenditure testwork we noted the following: 1. The Alliance could not provide supporting documentation, such as an invoice, purchase order or receipt, for $197 out of $14,881 expenses tested. 2. There were no itemized receipts for four purchases of $315. 3. One of the submitted receipts included an unallowable alcoholic beverage purchase totaling $39.Context: Four out of Five invoices sampled for reimbursed expenses tested. Questioned Costs: $552. Cause: The Alliance did not ensure that reimbursed expenses were supported by appropriate documentation and there was a lack of review to identify unallowable costs. Effect: The program was charged for costs that were not adequately supported and included unallowable costs. Recommendation: We recommend that the Alliance strengthen internal controls over the allowability and documentation of expenditures charged to federal awards by requiring original, itemized receipts for all purchases prior to reimbursement or payment. Additionally, the Alliance should implement a documented review and approval process to verify that each expenditure is allowable, reasonable, allocable, and adequately supported in accordance with Uniform Guidance. Management Response: ECA believes that the documentation existed at the time for the charges as we have all of the receipts prior to creating any bills. However, for the unallowable costs ($39), ECA is reversing the charge and has already implemented a process to ensure that such costs are not charged to the grants in the future
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Assistance Listing Number: 14.850 Noncompliance ? B. Allowable Costs/Cost Principles Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented. Condition: Based upon inspection of the Authority?s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: ? Alcoholic beverages (2 CFR section 200.423) ? Training and education costs for a non-employee (2 CFR section 200.473) ? Meals (2 CFR section 200.438) Known Questioned Costs: $3,118 Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principle type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principle requirements. Effect: The Public and Indian Housing Program is in non-compliance with the allowable costs/cost principle type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Public and Indian Housing Program to ensure that established internal control policies are being followed on a timely basis.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Assistance Listing Number: 14.850 Noncompliance ? B. Allowable Costs/Cost Principles Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Allowable Costs/Cost Principles Criteria: The Authority's federal program expenditures must meet the requirements of 2 CFR Part 200 Subpart E Cost Principles and must be adequately documented. Condition: Based upon inspection of the Authority?s paid invoices and on discussion with management, there were costs that were determined to be unallowable. Context: The following costs were determined to be unallowable or not reasonable or necessary in the proper and efficient performance of the federal program: ? Alcoholic beverages (2 CFR section 200.423) ? Training and education costs for a non-employee (2 CFR section 200.473) ? Meals (2 CFR section 200.438) Known Questioned Costs: $3,118 Cause: There is a significant deficiency in internal controls over the compliance for the allowable costs/cost principle type of compliance. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance with the allowable costs/cost principle requirements. Effect: The Public and Indian Housing Program is in non-compliance with the allowable costs/cost principle type of compliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Public and Indian Housing Program to ensure that established internal control policies are being followed on a timely basis.