Finding 1105603 (2022-001)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2025-03-20

AI Summary

  • Core Issue: There is a material weakness in internal controls over compliance and financial reporting, leading to improper allocation of administrative costs to the federal award.
  • Impacted Requirements: Costs must be allocated equitably among all activities benefiting from them, as per 45 CFR Part 75 Subpart E §75.405.
  • Recommended Follow-Up: Develop and implement controls for accurate cost allocation; ensure staff training on compliance and cost management is ongoing.

Finding Text

Finding Number: 2022-001 Finding Type: Federal award finding and financial statement finding Federal Assistance Listing No.: 93.591 Program Name: Family Violence Prevention and Services/State Domestic Violence Coalition Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: n/a Grant Number: 2101ORSDVC Federal Award Year: 2021 Control Deficiency Type: Material weakness in internal controls over compliance and financial reporting Instance of Noncompliance: Yes Compliance Requirement: Allowable costs Questioned Costs: None over $25,000 Repeat Finding: Yes Criteria: According to 45 CFR Part 75 Subpart E §75.405 Allocable Costs, a cost is allocable to a particular federal award in accordance with the relative benefits received. Costs that benefit both the federal award and other work of the entity should be distributed in proportions that may be approximated using reasonable methods. All activities which benefit from the costs must receive an appropriate allocation of the costs. Condition: During the audit, it was noted that costs appearing administrative in nature, i.e., contract accountant, insurance, dues and memberships, and audit expenses, were charged to the federal award based on the award budget and were not distributed in an equitable method to all activities that benefited from the costs. Cause: The Coalition’s understanding is that the award allows 100% of these costs, up to the award budgeted amount for management and shared expenses, to be charged to the federal award. Effect: Costs that that benefitted all programs were not distributed in an equitable method to all activities that benefited from the costs. Audit Recommendation: We recommend the Coalition develop controls and procedures to correctly allocate costs to all activities and funding sources that benefited from the costs. Management’s Response: OCADSV added an Administrative Cost Center to its General Ledger effective 10/01/22, the beginning of FY23 and began costing administrative payroll cost to that cost center. Additionally, the organization retrained administrative staff on direct cost allowable activities vs. administrative activities relative to timekeeping and timesheet preparation and the necessity of daily work descriptions supporting the hourly allocation. The Payroll policy that requires supervisors to review and sign off on timesheets and hourly allocations to cost centers was also reviewed. Audit costs for FY22 will be allocated in accordance with 2 CFR 200.405 requirements. Beginning with FY23 all accounting and other admin payroll related cost will be allocated to the administration cost center with the exception of time related to specific grant or other cost center. FY22 grant expenditures were reviewed post year-end and a line-by-line review was conducted to bring the direct and indirect expense cumulative total into compliance with audit findings. Any outstanding reports were adjusted to reflect the adjusted life of grant to current date reporting. Executive, Financial and Grant Management staff will, during FY24, complete the Online Grants Financial management Training available at onlinefmt.training.ojp.gov to improve knowledge and compliance with 2 CFR 200 guidance and requirements. The said training will be incorporated into onboarding processes for any newly hired employee who have direct responsibilities related to grant management and/or reporting. Effective 6/21/23 and ongoing: OCADSV is continuing its’ efforts to implement controls and procedures for directly or indirectly allocating costs to Programs based on the benefit of the cost. Direct allocation is used when a specific budget program line for funding exists, or where Program(s) can be identified. For indirect cost allocation different allocation methods may be used, depending on the cost type and only after the Program(s) where the costs benefited are identified. Financial staff review grant expenditures line by line, using program budgets for additional support, in preparing quarterly funding reimbursements.

Categories

Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Other Findings in this Audit

  • 529158 2022-001
    Material Weakness Repeat
  • 529159 2022-003
    Material Weakness
  • 529160 2022-004
    Significant Deficiency Repeat
  • 529161 2022-001
    Material Weakness Repeat
  • 529162 2022-003
    Material Weakness
  • 529163 2022-004
    Significant Deficiency Repeat
  • 1105600 2022-001
    Material Weakness Repeat
  • 1105601 2022-003
    Material Weakness
  • 1105602 2022-004
    Significant Deficiency Repeat
  • 1105604 2022-003
    Material Weakness
  • 1105605 2022-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
16.556 State Domestic Violence and Sexual Assault Coalitions $159,783
93.591 Family Violence Prevention and Services/state Domestic Violence Coalitions $118,918
93.991 Preventive Health and Health Services Block Grant $83,228
93.671 Family Violence Prevention and Services/domestic Violence Shelter and Supportive Services $67,668
16.582 Crime Victim Assistance/discretionary Grants $53,519
14.267 Continuum of Care Program $9,942
93.665 Emergency Grants to Address Mental and Substance Use Disorders During Covid-19 $5,000