Finding Text
Significant Deficiency in Internal Control Over Compliance– Appropriate Internal Control Structure Related to Compliance Requirements – B. Allowable Costs/Cost Principles
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires non-Federal entities receiving Federal funds to have certain written policies, procedures, and standards of conduct (policies) in place.
Condition and Context: The Organization does not have the written policies in place in accordance with §200.302 Financial Management paragraph (b)(7), which requires written procedures for determining the allowability of costs in accordance with Subpart E of the Uniform Guidance and the terms and conditions of the federal award or §200.431 Compensation – Fringe Benefits paragraphs (b)(1) and (c), which requires written policies related to the payment of certain fringe benefits.
Cause and Effect: As the policies referenced above are not written, the Organization is not in compliance with the requirements. In addition, lack of written policies related to federal awards may lead to noncompliance with other federal requirements and the terms and conditions of federal awards.
Recommendation: We recommend the policies in accordance with §200.302 Financial Management paragraph (b)(7) and §200.431 Compensation – Fringe Benefits paragraphs (b)(1) and (c) be written by the Organization, approved by the Board of Directors, and included in the permanent files of the Organization.
Views of Responsible Officials and Planned Corrective Action: The Organization agrees with the recommendation and plans to implement a formal review expenditures of federal awards corrective action by December 31, 2024.