Finding Text
2024-002 (Significant Deficiency) – Activities Allowed or Unallowed and Allowable
Costs/Cost Principles
Federal Program: AL 10.565, 10.568, and 10.569 Food Distribution Cluster
Criteria: Per Uniform Guidance 2 CFR section 200.421, costs for public relations
that are not specifically related to the federal award are unallowable.
Condition: Food for the Organization’s community event was included in the
population of expenses allocated to the grant.
Cause: Management oversight
Effect: The Organization charged unallowable expenses to the grant.
Context: As part of the single audit testing, 40 transactions were selected for
testing. One invoice tested was for food costs for the Organization’s 40th
Anniversary community event. This is considered unallowable costs as it
is costs for a public relations event that is not specifically related to the
federal award.
Questioned Costs: Immaterial
Repeat Finding: No
Recommendation: The Organization should review their policies and procedures for
allocating expenses to grants and only charge allowable expenses.
View of
Responsible
Officials: Management agrees with the recommendation and will review their
procedures for allocating expenses to grants to ensure only allowable
expenses are charged to the grant.