2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable cost principles. 2 CFR § 200.403 provides, in part, that 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 award and be allocable thereto under these principles and be adequately documented. Due to a lack of internal control over expenditures and documentation, testing of expenditures identified a payment charged twice to the WIOA Cluster accounting system. As such, the second entry for the payment had no invoice support and was not valid. The total amount tested that had no invoice support was $369,757 and was determined to be unallowable. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Policies and procedures over documentation of expenditures should be developed and implemented. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. The expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2022-004 above for this issue in detail.
2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable cost principles. 2 CFR § 200.403 provides, in part, that 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 award and be allocable thereto under these principles and be adequately documented. Due to a lack of internal control over expenditures and documentation, testing of expenditures identified a payment charged twice to the WIOA Cluster accounting system. As such, the second entry for the payment had no invoice support and was not valid. The total amount tested that had no invoice support was $369,757 and was determined to be unallowable. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Policies and procedures over documentation of expenditures should be developed and implemented. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. The expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2022-004 above for this issue in detail.
2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable cost principles. 2 CFR § 200.403 provides, in part, that 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 award and be allocable thereto under these principles and be adequately documented. Due to a lack of internal control over expenditures and documentation, testing of expenditures identified a payment charged twice to the WIOA Cluster accounting system. As such, the second entry for the payment had no invoice support and was not valid. The total amount tested that had no invoice support was $369,757 and was determined to be unallowable. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Policies and procedures over documentation of expenditures should be developed and implemented. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. The expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2022-004 above for this issue in detail.
2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable cost principles. 2 CFR § 200.403 provides, in part, that 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 award and be allocable thereto under these principles and be adequately documented. We further noted that 20 CFR § 671.140 states the following as allowable activities: (a) National emergency grants may provide adjustment assistance for eligible dislocated workers, described at WIA section 173(c)(2) or (d)(2). (b) Adjustment assistance includes the core, intensive, and training services authorized at WIA sections 134(d) and 173. The scope of services to be provided in a particular project are negotiated between the Department and the grantee, taking into account the needs of the target population covered by the grant. The scope of services may be changed through grant modifications, if necessary. (c) National emergency grants may provide for supportive services to help workers who require such assistance to participate in activities provided for in the grant. Needs-related payments, in support of other employment and training assistance, may be available for the purpose of enabling dislocated workers who are eligible for such payments to participate in programs of training services. Generally, the terms of a grant must be consistent with Local Board policies governing such financial assistance with formula funds (including the payment levels and duration of payments). However, the terms of the grant agreement may diverge from established Local Board policies, in the following instances: (1) If unemployed dislocated workers served by the project are not able to meet the 13 or 8 weeks enrollment in training requirement at WIA section 134(e)(3)(B) because of the lack of formula or emergency grant funds in the State or local area at the time of dislocation, such individuals may be eligible for needs-related payments if they are enrolled in training by the end of the 6th week following the date of the emergency grant award; (2) Trade-impacted workers who are not eligible for trade readjustment assistance under NAFTA-TAA may be eligible for needs-related payments under a national emergency grant if the worker is enrolled in training by the end of the 16th week following layoff; and (3) Under other circumstances as specified in the national emergency grant application guidelines. (d) A national emergency grant to respond to a declared emergency or natural disaster, as defined at § 671.110(e), may provide short-term disaster relief employment for: Individuals who are temporarily or permanently laid off as a consequence of the disaster; Dislocated workers; and Long-term unemployed individuals. (e) Temporary employment assistance is authorized on disaster projects that provide food, clothing, shelter and other humanitarian assistance for disaster victims; and on projects that perform demolition, cleaning, repair, renovation and reconstruction of damaged and destroyed structures, facilities and lands located within the disaster area. For such temporary jobs, each eligible worker is limited to no more than six months of employment for each single disaster. The amounts, duration and other limitations on wages will be negotiated for each grant. (f) Additional requirements that apply to national emergency grants, including natural disaster grants, are contained in the application instructions. Due to a lack of internal control over expenditures and documentation, testing of expenditures identified a payment charged to the NEG Federal Program twice in the accounting system. As such, the second entry for the payment had no invoice support and was not valid. The total amount tested that had no invoice support was $191,416 and was determined to be unallowable. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Policies and procedures over documentation of expenditures should be developed and implemented. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. The expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2022-004 above for this issue in detail.
SUMMARY OF AUDIT RESULTS 1. The auditor?s report expresses an unmodified opinion on whether the financial statements of Lincoln School Senior Apartments are prepared and presented in accordance with U.S. generally accepted accounting principles. 2. No material weaknesses or significant deficiencies were identified during the audit of the financial statements. 3. No instances of noncompliance material to the financial statements of Lincoln School Senior Apartments were disclosed during the audit. 4. No material weaknesses or significant deficiencies were identified during the audit of the major federal awards program. 5. The auditor?s report on compliance for major federal awards programs for Lincoln School Senior Apartments expresses an unmodified opinion. 6. There were audit findings relative to the major federal program for Lincoln School Senior Apartments that are required to be reported in accordance with 2 CFR Section 200.516(a) reported in this schedule as Finding 2022-001. 7. The program tested as a major program included: CFDA #14-157 HUD Section 202 - Supportive Housing for the Elderly. 8. The threshold for distinguishing Types A and B programs was $750,000. 9. Lincoln School Senior Apartments was not determined to be a low-risk auditee. FINDINGS ? FINANCIAL STATEMENTS AUDIT NONE. FINDINGS ? MAJOR FEDERAL AWARD PROGRAMS AUDIT DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT S3800-010 Finding Reference Number 2022-001 S3800-011 Title and CFDA Number of Federal Program - 14-157 Supportive Housing for the Elderly S3800-015 Type of Finding - Federal Award Finding S3800-016 Finding Resolution Status - Resolved S3800-017 Information on Universe Population Size ? Not Applicable S3800-018 Sample Size Information ? Not Applicable DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Continued) S3800-010 Finding Reference Number 2022-001(Continued) S3800-019 Identification of Repeat Finding and Finding Reference Number - Not Applicable S3800-020 Criteria ? The HUD Regulatory Agreement requires monthly deposits to a replacement reserve account. S3800-030 Statement of Condition ? All of the deposits were made at year end, but due to availability of funds, three of the twelve deposits were made late. S3800-032 Cause ? Because the Project did not always have sufficient funds to make the required deposit, some deposits were delayed. By the end of the fiscal year all of the deposits had been made. S3800-033 Effect or Potential Effect ? Management did not always follow the requirements of the regulatory agreement of making monthly deposits. S3800-035 Auditor Non-Compliance Code - (N) Replacement Reserve Deposits under Special Tests and Provisions S3800-040 Questioned Costs - $0 S3800-045 Reporting Views of Responsible Officials - Management applied for and received a significant rent increase from HUD that should help improve liquidity so that sufficient funds are available to make the required reserve deposit when due. Property(s) and associated questioned costs this finding applies to: S3800-037 FHA/Contract Number - 127EE034 S3800-038 Questioned Costs - $0 S3800-050 Context ? See statement of condition. S3800-080 Recommendation - Management has taken steps to improve liquidity so that sufficient funds should be available for monthly deposits. Management should ensure those deposits are made monthly. S3800-090 Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Management concurs with the auditor?s recommendation, and has taken corrective actions to improve liquidity so sufficient funds are available to make the deposits monthly. S3800-130 Response Indicator - Agree S3800-140 Completion Date ? June 20, 2022 S3800-150 Response - Management has taken corrective action and concurs with the auditor?s recommendation.
SUMMARY OF AUDIT RESULTS 1. The auditor?s report expresses an unmodified opinion on whether the financial statements of Lincoln School Senior Apartments are prepared and presented in accordance with U.S. generally accepted accounting principles. 2. No material weaknesses or significant deficiencies were identified during the audit of the financial statements. 3. No instances of noncompliance material to the financial statements of Lincoln School Senior Apartments were disclosed during the audit. 4. No material weaknesses or significant deficiencies were identified during the audit of the major federal awards program. 5. The auditor?s report on compliance for major federal awards programs for Lincoln School Senior Apartments expresses an unmodified opinion. 6. There were audit findings relative to the major federal program for Lincoln School Senior Apartments that are required to be reported in accordance with 2 CFR Section 200.516(a) reported in this schedule as Finding 2022-001. 7. The program tested as a major program included: CFDA #14-157 HUD Section 202 - Supportive Housing for the Elderly. 8. The threshold for distinguishing Types A and B programs was $750,000. 9. Lincoln School Senior Apartments was not determined to be a low-risk auditee. FINDINGS ? FINANCIAL STATEMENTS AUDIT NONE. FINDINGS ? MAJOR FEDERAL AWARD PROGRAMS AUDIT DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT S3800-010 Finding Reference Number 2022-001 S3800-011 Title and CFDA Number of Federal Program - 14-157 Supportive Housing for the Elderly S3800-015 Type of Finding - Federal Award Finding S3800-016 Finding Resolution Status - Resolved S3800-017 Information on Universe Population Size ? Not Applicable S3800-018 Sample Size Information ? Not Applicable DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Continued) S3800-010 Finding Reference Number 2022-001(Continued) S3800-019 Identification of Repeat Finding and Finding Reference Number - Not Applicable S3800-020 Criteria ? The HUD Regulatory Agreement requires monthly deposits to a replacement reserve account. S3800-030 Statement of Condition ? All of the deposits were made at year end, but due to availability of funds, three of the twelve deposits were made late. S3800-032 Cause ? Because the Project did not always have sufficient funds to make the required deposit, some deposits were delayed. By the end of the fiscal year all of the deposits had been made. S3800-033 Effect or Potential Effect ? Management did not always follow the requirements of the regulatory agreement of making monthly deposits. S3800-035 Auditor Non-Compliance Code - (N) Replacement Reserve Deposits under Special Tests and Provisions S3800-040 Questioned Costs - $0 S3800-045 Reporting Views of Responsible Officials - Management applied for and received a significant rent increase from HUD that should help improve liquidity so that sufficient funds are available to make the required reserve deposit when due. Property(s) and associated questioned costs this finding applies to: S3800-037 FHA/Contract Number - 127EE034 S3800-038 Questioned Costs - $0 S3800-050 Context ? See statement of condition. S3800-080 Recommendation - Management has taken steps to improve liquidity so that sufficient funds should be available for monthly deposits. Management should ensure those deposits are made monthly. S3800-090 Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Management concurs with the auditor?s recommendation, and has taken corrective actions to improve liquidity so sufficient funds are available to make the deposits monthly. S3800-130 Response Indicator - Agree S3800-140 Completion Date ? June 20, 2022 S3800-150 Response - Management has taken corrective action and concurs with the auditor?s recommendation.
Finding 2021-005 Activities Allowed and Unallowed, Allowable Costs, Period of Performance – Material Weakness in Internal Control over Compliance and Noncompliance Agency U.S. Department of Treasury Program ALN: No. 21.019 COVID-19 Coronavirus Relief Fund Award Year 2021 Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic Development Pass-Through Entity Identifying Number 20-CFR-029 Criteria or Specific Requirement 2 CFR Subtitle A Chapter II Part 200 Subpart E states that a non-Federal entity must provide for adequate documentation to support costs charged to the Federal Award. 2 CFR Subtitle A Chapter II Part 200 Subpart F section 200.516 states that the auditor must report known questioned costs when likely questioned costs are greater than $25,000 for a type of compliance requirement for a major program. Condition Testwork over a sample of nineteen nonpayroll transactions charged to the Coronavirus Relief Fund Grant identified that two transactions, totaling $4,891, lacked supporting documentation. Cause Internal controls did not ensure that proper supporting documentation was retained in accordance with 2 CFR. 105 Effect or potential effect Questioned Costs Context Repeat Finding Recommendation Views of responsible officials Testwork over nonpayroll transactions charged to the Coronavirus Relief Fund Grant identified questioned costs. $4,891 BDO tested a sample of nineteen nonpayroll transactions and identified two transactions that lacked supporting documentation. The known questioned costs extrapolated over the total population exceeded the reporting threshold of $25,000 for likely questioned costs. No. Management should ensure that purchasing policies and procedures are properly designed, implemented, and operating effectively to ensure adequate documentation is retained to sufficiently support procured goods and services charged to federal awards. Management agrees with the finding. Management is currently undergoing an upgrade in record retention policies and procedures.
Finding 2021-005 Activities Allowed and Unallowed, Allowable Costs, Period of Performance – Material Weakness in Internal Control over Compliance and Noncompliance Agency U.S. Department of Treasury Program ALN: No. 21.019 COVID-19 Coronavirus Relief Fund Award Year 2021 Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic Development Pass-Through Entity Identifying Number 20-CFR-029 Criteria or Specific Requirement 2 CFR Subtitle A Chapter II Part 200 Subpart E states that a non-Federal entity must provide for adequate documentation to support costs charged to the Federal Award. 2 CFR Subtitle A Chapter II Part 200 Subpart F section 200.516 states that the auditor must report known questioned costs when likely questioned costs are greater than $25,000 for a type of compliance requirement for a major program. Condition Testwork over a sample of nineteen nonpayroll transactions charged to the Coronavirus Relief Fund Grant identified that two transactions, totaling $4,891, lacked supporting documentation. Cause Internal controls did not ensure that proper supporting documentation was retained in accordance with 2 CFR. 105 Effect or potential effect Questioned Costs Context Repeat Finding Recommendation Views of responsible officials Testwork over nonpayroll transactions charged to the Coronavirus Relief Fund Grant identified questioned costs. $4,891 BDO tested a sample of nineteen nonpayroll transactions and identified two transactions that lacked supporting documentation. The known questioned costs extrapolated over the total population exceeded the reporting threshold of $25,000 for likely questioned costs. No. Management should ensure that purchasing policies and procedures are properly designed, implemented, and operating effectively to ensure adequate documentation is retained to sufficiently support procured goods and services charged to federal awards. Management agrees with the finding. Management is currently undergoing an upgrade in record retention policies and procedures.
2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable costs principles. This guidance provides that for a cost to be allowable, it must (1) be for a purpose the specific award permits and (2) fall within 2 CFR 200 Subpart E - Cost Principles. WIOA, 128 Stat. 1525 et seq. outlines the various allowable activities for this program. During testing of fiscal year 2021, there were costs charged to the WIOA Cluster that were not supported by invoices. The total amount tested that had no invoice support was $11,484 between 4 different checks. Thus, we could not determine if these costs were allowable or not. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. It is likely that the projected expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2021-003 above for this issue in detail.
2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable costs principles. This guidance provides that for a cost to be allowable, it must (1) be for a purpose the specific award permits and (2) fall within 2 CFR 200 Subpart E - Cost Principles. WIOA, 128 Stat. 1525 et seq. outlines the various allowable activities for this program. During testing of fiscal year 2021, there were costs charged to the WIOA Cluster that were not supported by invoices. The total amount tested that had no invoice support was $11,484 between 4 different checks. Thus, we could not determine if these costs were allowable or not. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. It is likely that the projected expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2021-003 above for this issue in detail.
2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable costs principles. This guidance provides that for a cost to be allowable, it must (1) be for a purpose the specific award permits and (2) fall within 2 CFR 200 Subpart E - Cost Principles. WIOA, 128 Stat. 1525 et seq. outlines the various allowable activities for this program. During testing of fiscal year 2021, there were costs charged to the WIOA Cluster that were not supported by invoices. The total amount tested that had no invoice support was $11,484 between 4 different checks. Thus, we could not determine if these costs were allowable or not. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. It is likely that the projected expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2021-003 above for this issue in detail.
2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable costs principles. This guidance provides that for a cost to be allowable, it must (1) be for a purpose the specific award permits and (2) fall within 2 CFR 200 Subpart E - Cost Principles. We further noted that 20 CFR section 671.140 states the following as allowable activities: (a) National emergency grants may provide adjustment assistance for eligible dislocated workers, described at WIA section 173(c)(2) or (d)(2). (b) Adjustment assistance includes the core, intensive, and training services authorized at WIA sections 134(d) and 173. The scope of services to be provided in a particular project are negotiated between the Department and the grantee, taking into account the needs of the target population covered by the grant. The scope of services may be changed through grant modifications, if necessary. (c) National emergency grants may provide for supportive services to help workers who require such assistance to participate in activities provided for in the grant. Needs-related payments, in support of other employment and training assistance, may be available for the purpose of enabling dislocated workers who are eligible for such payments to participate in programs of training services. Generally, the terms of a grant must be consistent with Local Board policies governing such financial assistance with formula funds (including the payment levels and duration of payments). However, the terms of the grant agreement may diverge from established Local Board policies, in the following instances: (1) If unemployed dislocated workers served by the project are not able to meet the 13 or 8 weeks enrollment in training requirement at WIA section 134(e)(3)(B) because of the lack of formula or emergency grant funds in the State or local area at the time of dislocation, such individuals may be eligible for needs-related payments if they are enrolled in training by the end of the 6th week following the date of the emergency grant award; (2) Trade-impacted workers who are not eligible for trade readjustment assistance under NAFTA-TAA may be eligible for needs-related payments under a national emergency grant if the worker is enrolled in training by the end of the 16th week following layoff; and (3) Under other circumstances as specified in the national emergency grant application guidelines. (d) A national emergency grant to respond to a declared emergency or natural disaster, as defined at § 671.110(e), may provide short-term disaster relief employment for: (1) Individuals who are temporarily or permanently laid off as a consequence of the disaster; (2) Dislocated workers; and (3) Long-term unemployed individuals. (e) Temporary employment assistance is authorized on disaster projects that provide food, clothing, shelter and other humanitarian assistance for disaster victims; and on projects that perform demolition, cleaning, repair, renovation and reconstruction of damaged and destroyed structures, facilities and lands located within the disaster area. For such temporary jobs, each eligible worker is limited to no more than six months of employment for each single disaster. The amounts, duration and other limitations on wages will be negotiated for each grant. (f) Additional requirements that apply to national emergency grants, including natural disaster grants, are contained in the application instructions. During testing of fiscal year 2021, there were costs charged to this grant that were not supported by invoices. The total amount tested that had no invoice support was $14,615 between 7 different checks. Thus, we could not determine if these costs were allowable or not. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. It is likely that the projected expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2021-003 above for this issue in detail.
Finding 2021-005 Activities Allowed and Unallowed, Allowable Costs, Period of Performance – Material Weakness in Internal Control over Compliance and Noncompliance Agency U.S. Department of Treasury Program ALN: No. 21.019 COVID-19 Coronavirus Relief Fund Award Year 2021 Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic Development Pass-Through Entity Identifying Number 20-CFR-029 Criteria or Specific Requirement 2 CFR Subtitle A Chapter II Part 200 Subpart E states that a non-Federal entity must provide for adequate documentation to support costs charged to the Federal Award. 2 CFR Subtitle A Chapter II Part 200 Subpart F section 200.516 states that the auditor must report known questioned costs when likely questioned costs are greater than $25,000 for a type of compliance requirement for a major program. Condition Testwork over a sample of nineteen nonpayroll transactions charged to the Coronavirus Relief Fund Grant identified that two transactions, totaling $4,891, lacked supporting documentation. Cause Internal controls did not ensure that proper supporting documentation was retained in accordance with 2 CFR. 105 Effect or potential effect Questioned Costs Context Repeat Finding Recommendation Views of responsible officials Testwork over nonpayroll transactions charged to the Coronavirus Relief Fund Grant identified questioned costs. $4,891 BDO tested a sample of nineteen nonpayroll transactions and identified two transactions that lacked supporting documentation. The known questioned costs extrapolated over the total population exceeded the reporting threshold of $25,000 for likely questioned costs. No. Management should ensure that purchasing policies and procedures are properly designed, implemented, and operating effectively to ensure adequate documentation is retained to sufficiently support procured goods and services charged to federal awards. Management agrees with the finding. Management is currently undergoing an upgrade in record retention policies and procedures.
Finding 2021-005 Activities Allowed and Unallowed, Allowable Costs, Period of Performance – Material Weakness in Internal Control over Compliance and Noncompliance Agency U.S. Department of Treasury Program ALN: No. 21.019 COVID-19 Coronavirus Relief Fund Award Year 2021 Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic Development Pass-Through Entity Identifying Number 20-CFR-029 Criteria or Specific Requirement 2 CFR Subtitle A Chapter II Part 200 Subpart E states that a non-Federal entity must provide for adequate documentation to support costs charged to the Federal Award. 2 CFR Subtitle A Chapter II Part 200 Subpart F section 200.516 states that the auditor must report known questioned costs when likely questioned costs are greater than $25,000 for a type of compliance requirement for a major program. Condition Testwork over a sample of nineteen nonpayroll transactions charged to the Coronavirus Relief Fund Grant identified that two transactions, totaling $4,891, lacked supporting documentation. Cause Internal controls did not ensure that proper supporting documentation was retained in accordance with 2 CFR. 105 Effect or potential effect Questioned Costs Context Repeat Finding Recommendation Views of responsible officials Testwork over nonpayroll transactions charged to the Coronavirus Relief Fund Grant identified questioned costs. $4,891 BDO tested a sample of nineteen nonpayroll transactions and identified two transactions that lacked supporting documentation. The known questioned costs extrapolated over the total population exceeded the reporting threshold of $25,000 for likely questioned costs. No. Management should ensure that purchasing policies and procedures are properly designed, implemented, and operating effectively to ensure adequate documentation is retained to sufficiently support procured goods and services charged to federal awards. Management agrees with the finding. Management is currently undergoing an upgrade in record retention policies and procedures.
2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable costs principles. This guidance provides that for a cost to be allowable, it must (1) be for a purpose the specific award permits and (2) fall within 2 CFR 200 Subpart E - Cost Principles. WIOA, 128 Stat. 1525 et seq. outlines the various allowable activities for this program. During testing of fiscal year 2021, there were costs charged to the WIOA Cluster that were not supported by invoices. The total amount tested that had no invoice support was $11,484 between 4 different checks. Thus, we could not determine if these costs were allowable or not. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. It is likely that the projected expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2021-003 above for this issue in detail.
2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable costs principles. This guidance provides that for a cost to be allowable, it must (1) be for a purpose the specific award permits and (2) fall within 2 CFR 200 Subpart E - Cost Principles. WIOA, 128 Stat. 1525 et seq. outlines the various allowable activities for this program. During testing of fiscal year 2021, there were costs charged to the WIOA Cluster that were not supported by invoices. The total amount tested that had no invoice support was $11,484 between 4 different checks. Thus, we could not determine if these costs were allowable or not. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. It is likely that the projected expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2021-003 above for this issue in detail.
2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable costs principles. This guidance provides that for a cost to be allowable, it must (1) be for a purpose the specific award permits and (2) fall within 2 CFR 200 Subpart E - Cost Principles. WIOA, 128 Stat. 1525 et seq. outlines the various allowable activities for this program. During testing of fiscal year 2021, there were costs charged to the WIOA Cluster that were not supported by invoices. The total amount tested that had no invoice support was $11,484 between 4 different checks. Thus, we could not determine if these costs were allowable or not. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. It is likely that the projected expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2021-003 above for this issue in detail.
2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable costs principles. This guidance provides that for a cost to be allowable, it must (1) be for a purpose the specific award permits and (2) fall within 2 CFR 200 Subpart E - Cost Principles. We further noted that 20 CFR section 671.140 states the following as allowable activities: (a) National emergency grants may provide adjustment assistance for eligible dislocated workers, described at WIA section 173(c)(2) or (d)(2). (b) Adjustment assistance includes the core, intensive, and training services authorized at WIA sections 134(d) and 173. The scope of services to be provided in a particular project are negotiated between the Department and the grantee, taking into account the needs of the target population covered by the grant. The scope of services may be changed through grant modifications, if necessary. (c) National emergency grants may provide for supportive services to help workers who require such assistance to participate in activities provided for in the grant. Needs-related payments, in support of other employment and training assistance, may be available for the purpose of enabling dislocated workers who are eligible for such payments to participate in programs of training services. Generally, the terms of a grant must be consistent with Local Board policies governing such financial assistance with formula funds (including the payment levels and duration of payments). However, the terms of the grant agreement may diverge from established Local Board policies, in the following instances: (1) If unemployed dislocated workers served by the project are not able to meet the 13 or 8 weeks enrollment in training requirement at WIA section 134(e)(3)(B) because of the lack of formula or emergency grant funds in the State or local area at the time of dislocation, such individuals may be eligible for needs-related payments if they are enrolled in training by the end of the 6th week following the date of the emergency grant award; (2) Trade-impacted workers who are not eligible for trade readjustment assistance under NAFTA-TAA may be eligible for needs-related payments under a national emergency grant if the worker is enrolled in training by the end of the 16th week following layoff; and (3) Under other circumstances as specified in the national emergency grant application guidelines. (d) A national emergency grant to respond to a declared emergency or natural disaster, as defined at § 671.110(e), may provide short-term disaster relief employment for: (1) Individuals who are temporarily or permanently laid off as a consequence of the disaster; (2) Dislocated workers; and (3) Long-term unemployed individuals. (e) Temporary employment assistance is authorized on disaster projects that provide food, clothing, shelter and other humanitarian assistance for disaster victims; and on projects that perform demolition, cleaning, repair, renovation and reconstruction of damaged and destroyed structures, facilities and lands located within the disaster area. For such temporary jobs, each eligible worker is limited to no more than six months of employment for each single disaster. The amounts, duration and other limitations on wages will be negotiated for each grant. (f) Additional requirements that apply to national emergency grants, including natural disaster grants, are contained in the application instructions. During testing of fiscal year 2021, there were costs charged to this grant that were not supported by invoices. The total amount tested that had no invoice support was $14,615 between 7 different checks. Thus, we could not determine if these costs were allowable or not. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. It is likely that the projected expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2021-003 above for this issue in detail.