Finding 1101713 (2024-001)

Federal Agency: U.S. Department of Defense Federal Program Name: Airforce Defense Research and Sciences Program Assistance Listing Number: 12.800 Pass-Through Agency: National Center for Defense Manufacturing and Machining Award Period: October 10, 2023 through October 3, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of allowable costs with respect to grant expenditures. Condition and Context: During our testing, two of three employees were identified as having erroneously calculated rates applied to the program, leading to unallowable expenses being submitted on monthly invoices. Questioned costs: $152 Cause: There were inadequate internal controls relating to review of the calculation of employee rates applied to the program. Effect: Grant expenditures were reported inaccurately on the monthly invoices. Repeat Finding: N/A Recommendation: We recommend the client design controls to ensure an adequate review process is in place to review the employee rates used to calculate costs applied to the program and submitted in monthly invoices to ensure costs are allowable. Views of responsible officials: There is no disagreement with the audit finding. The Organization has conducted a review of current employee rates and established a policy to review any revisions made to the rates.