Finding Text
Federal Awarding Agency: U.S. Department of Health and Human Services
Pass-Through Entity: Sacramento County
Category of Finding: Allowable Cost/Cost Principles
Federal-Pass through Grantor: 7206000-23-136
AL No: 93.778
Finding: The audit identified noncompliance by the nonprofit organization regarding the requirements stipulated in
OMB Circular A-133. This OMB mandates that federal awards must be accounted for and reported separately from
other funds. Notably, the organization's current practice involves allocating multiple funding sources to the facilities it
operates without ensuring the necessary segregation of federal awards. Furthermore, the audit identified that the
auditee did not provide adequate written policies, procedures, and standards of conduct in accordance with the federal
regulations (2 CFR 200, Subparts D and E).
Cause: The nonprofit organization did not have adequate controls in place to ensure that federal awards were tracked
and accounted for separately from other funds. There was a lack of communication and coordination among the
different departments responsible for tracking and reporting federal awards.
Effect: The failure to account for federal awards separately from other funds could result in the organization
inadvertently using federal funds for purposes that are not allowed or in violation of federal regulations. It could also
lead to difficulties in properly reporting and accounting for the use of federal awards, which could result in audit findings
or compliance issues.
Criteria: The Organization should ensure that its practices align with the requirements stated in OMB Circular A-133.
Questioned costs – Unknown
Repeat finding - Yes
Recommendation: The organization should promptly develop, document, and implement the required policies and
procedures in accordance with 2 CFR 200. The nonprofit organization should establish and implement effective
controls to ensure that federal awards are tracked and accounted for separately from other funds, in accordance with
the requirements of OMB Circular A-133. This could include designating a specific account or accounts for federal
awards, ensuring that federal awards are coded and tracked separately in the organization's accounting system, and
implementing regular reconciliations to ensure that federal awards are properly accounted for. Additionally, the
organization should provide training to staff members responsible for handling federal awards to ensure that they are
aware of the requirements for tracking and accounting for federal awards separately. Finally, the organization should
conduct regular reviews and monitoring of its financial management processes to ensure that federal awards are being
used in compliance with all applicable laws and regulations, including proper segregation and allocation of indirect
costs.