Finding Text
Finding Number 2023-006: Costs Incurred Outside Period of Performance (Significant Deficiency over
Internal Control and Instances of Noncompliance – Period of Performance; Allowable Costs/Cost
Principles) FALN Number 93.959 Block Grants for Prevention and Treatment of Substance Abuse, Award Number 900077, Award Year 2022-2023
Criteria: 2023 Compliance Supplement and 2 CFR 200.403(h) stated that a non-federal entity may charge only
allowable costs incurred during the approved budget period of a federal award’s period of performance.
Condition/Context: As a result of our audit procedures, we noted 2 of 25 timesheets tested in which the costs
incurred were charged outside of the program’s performance period. The two timesheets had payroll costs
incurred during the pay period of 6/12/2022 – 6/25/2022; however, the contract had a performance period of
7/1/2022 – 6/30/2023.
Repeat Finding from Prior Year(s): No
Cause and Effect: The Health System did not have proper controls in place to ensure only costs incurred in the
performance period were charged to the program, which resulted in non-compliance with program requirements.
Questioned Cost: None
Recommendation: We recommend management review policies and procedures of the program to ensure the
costs incurred are appropriately charged based on the contracts’ performance periods.
Views of Responsible Officials and Planned Corrective Action:
Management agrees with the finding. The Health System will review, modify, and implement policies and
procedures over the program to ensure that costs incurred are appropriately charged based on the contracts’
performance periods.