Finding Text
Finding No. 2023-003: Activities Allowed or Unallowed and Allowable Costs/Cost Principles –
Material Weakness
Federal Program Name: All
Pass-through Entity: All
Federal Assistance Listing Number: All
Criteria
Title 2 U.S. Code of Federal Regulations Part 200 establishes cost principles for determining costs
applicable to federal awards. These principles include the requirement that cost allocation
methodologies be reasonable and documented and that all expenses charged to federal awards are
appropriately supported. The cost allocations should be reviewed and updated for changes to
operations.
Condition
The Organization was unable to produce documentation supporting its cost allocation plan (“CAP”).
Operating expenditures reported on submitted grant reports did not consistently reconcile directly back
to the underlying accounting records.
Cause
The Organization was unable to produce support for the allocation of costs to federal awards. The CAP
has not been updated regularly.
Effect
The basis for computing and allocating costs to federal awards according to the CAP is unsupported.
Questioned Costs
Unknown.
Context
The Organization is unable to document the basis for allocating costs to its federal awards.
Recommendation
We recommend that the Organization document its basis for allocating costs to federal awards, and that
the supporting documentation and related reconciliations be retained, in accordance with the Uniform
Guidance. The CAP should be reviewed periodically and updated for changes in operations as deemed
necessary, and approved by the Board of Directors.
Management’s Response/View of Responsible Officials
Management agrees with this finding, see the Corrective Action Plan