Finding Text
Condition: Rent expense for the 2025 fiscal year in one branch office was paid in advance, in order to receive a discount, and charged to the federal award rather than capitalized and amortized over the period of benefit. Criteria: Costs must be determined in accordance with generally accepted accounting principles (GAAP). Context: World Relief follows GAAP in financial reporting. Cause: As rent is routinely charged each month it is paid, management overlooked capitalizing the payment and amortizing it over the periods benefited. Effect: As this cost was a prepayment for future period benefit, it was not determined in accordance with generally accepted accounting principles as required under 2 CFR 200.403, Factors affecting allowability of costs.