Finding 1093098 (2022-003)

Finding 2022-003: Material Weakness and Questioned Cost – Grant Claim Support Federal grantor: Department of Commerce Condition: The Chamber’s expenditure detail for the grant funded projects do not support the amounts billed to the Department of Commerce. The amounts billed were more than the general ledger detail supported. Criteria: A reconciliation of grant project expenses to the grant revenue billed should be performed. The supporting documentation of any reconciling items should be maintained with the grant bills. Also, 2 CFR 200.400 states that accounting practices of the entity be consistent with cost principals required under the CFR and support the accumulation of costs and provide adequate documentation to support costs charged to the Federal award. Cause: The Chamber billed costs to the grant that were not allocated in the accounting system to that grant and a reconciliation was not performed comparing the grant billings to the expense detail. Effect: The expenses billed to the grant may not be correct. Our reconciliation of these expenses disclosed an overbilling to the grant of approximately $2,500 in 2021. Recommendation: The Chamber needs to ensure that expenses to be reimbursed by federal grant funds are recorded in the class code in the accounting system for that grant so that federal grant revenue in the accounting system match the expenses allocated to that grant. The Chamber needs to include in their year-end reconciliations a comparison of grant revenue and expense and ensure they match or can be reconciled. Views of Responsible Officials and Planned Corrective Actions: The Chamber agrees with this finding and is in the process of implementing a system for improved grant tracking.