Finding Text
Finding 2023-001
Material weakness in internal controls over compliance and instances of noncompliance related to allowable costs/cost principles compliance requirements.
Federal Agency: Department of Health and Human Services (HHS)
Pass-Through: State of Washington Department of Health (DOH)
Program Title: HIV Prevention Activities Health Department
Assistance Listing Number: 93.940
Award Number: CBO27200; CBO28119
Award Period: July 01, 2022 through August 31, 2023 and July 01, 2023 through
December 31, 2023
Criteria
2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance), Subpart E ‐ Cost Principles, Section 200.405 requires that a non-federal entity allocate costs based on the benefits received and costs that benefit both the federal award and other work of the non-federal entity are distributed in proportions that may be approximated using reasonable methods.
Condition/Context for Evaluation
During our testing of allowable costs, we noted that the non-federal entity applied costs for bonuses, insurance, and the audit fee to the federal program without performing an allocation of the costs to the program and others based on the proportional benefit.
Cause
The Organization's management was not aware of the allocation requirements of 2 CFR section 200.405.
Effect or Potential Effect
The Organization did not apply the Uniform Guidance 2 CFR in the allocation of bonuses, insurance, and audit fees resulting in questioned costs.
Questioned Costs
$29,512
Repeat Finding
No.
Recommendation
We recommend the Organization implement measures to ensure that its allocation methodology follow the allocability requirements of Subpart E in 2 CFR Part 200.
Views of Responsible Officials and Corrective Action Plan
Management agrees with the finding and has provided the accompanying corrective action plan.