Finding Text
Finding 2024-007 – Allowable Costs & Period of Performance (Material Weakness and
Noncompliance)
Information on the Federal Program: U.S. Department of Education, Higher Education-
Institutional Aid (Title III), Assistance Listing No. 84.031
Criteria: 2 CFR Part 200 Subpart E establishes cost principles to apply in determining costs under
federal awards. Non-federal entities are also required to establish controls over the disbursement
process to ensure compliance with allowable cost requirements. In addition, a non-federal entity
may charge only allowable costs incurred during the approved budget period of a federal award’s
period of performance and any costs incurred before the federal awarding agency or pass-through
entity made the federal award that were authorized by the federal awarding agency or pass-through
entity (2 CFR sections 200.308, 200.309, and 200.403(h)).
Condition: We selected a sample of 25 non-payroll disbursements and 25 payroll disbursements
charged to the grant. Of the 25 non-payroll, 4 were missing an approval by the Director of Title III
Programs and 4 costs were not in the applicable budgets. In addition, 2 were charged to a fund
code for a grant period that ended September 30, 2023.
There were 44 pay checks tested in the sample of 25; of those 44, 31 exceptions were noted as
having an issue around the approved pay rate documentation. In 9 instances, there was no
documented approved pay rate, only support provided was a local salary schedule for multiple
positions for 6 of the exceptions. In 15 instances, there was no approval for salary to be charged to
the grant number and documentation showed unrestricted, a different account or offer letter had no
Title III documentation. In 7 instances, the approved pay rate did not agree to actual paycheck
report.
Cause: The College did not obtain proper approval by the Director of the program, expenses did
not fit into the grant budget line items, approved pay rates were not properly documented and the
College continued to use funds after the grant period ended based on verbal instruction.
Effect: The College’s grant disbursements were not properly approved.
Questioned Costs: $35,461
Recommendation: We recommend the College strengthen its policies and procedures surrounding
payroll and non-payroll grant disbursements to ensure controls are functioning and compliant with
federal regulations
Views of Responsible Officials: See Management’s View and Corrective Action Plan included at
the end of the report.