Finding Text
Finding 2023-001
Significant deficiency in internal controls over compliance related to allowable costs.
All Federal award programs
Criteria
A nonfederal entity may charge only allowable and allocable indirect costs to a federal award.
Condition/Context for Evaluation
During the audit for the year ending December 31, 2023, we experienced difficulties when obtaining documentation supporting the automated allocations of indirect costs directly allocated to the major program. In addition, we observed delayed reviews of the allocated indirect cost portion of grant billings.
Questioned Costs
Not determinable
Cause
The Organization’s lack of a consistent operation of internal controls was caused primarily by turnover of staff members during the period under audit.
Effect or Potential Effect
Unallowable indirect costs could be charged to the grant.
Repeat Finding
Not Applicable.
Recommendation
We recommend that management develop internal controls that require the documentation of the methods used and support for the directly allocated indirect costs. We also recommend a timely and thorough review of indirect costs and methods used to allocate those costs directly to Federal awards,
Views of Responsible Officials of Auditee
Management concurs with the finding and has provided the accompanying management corrective action.