Finding 1106538 (2022-002)

Significant Deficiency over Internal Control over Compliance, Noncompliance – Error in Reporting of Expenditures Criteria 2 CFR 200.303 of the Uniform Guidance requires Federal award recipients to establish and maintain effective internal control over Federal awards to provide reasonable assurance that the recipient’s expenditures of federal awards have been tracked and reported appropriately. Condition In one instance, PSA included a payroll accrual for musician wages as well as payroll expenditures for the same pay period, resulting in an overstatement of musician payroll expenses reported. Cause A detailed reconciliation and review of grant expenditures was not sufficiently performed to detect the error. Effect The payroll accrual coded to the grant resulted in an overstatement of the specific payroll costs reported, however, PSA’s allowable costs for the year ended September 30, 2022 exceeded the remaining grant balance by more than the amount of the mistake, therefore total Federal expenditures reported for the SVOG grant is accurate. Recommendation It is recommended that PSA establish reconciliation and review controls to detect any errors or miscoding of expenditures to Federal award programs. Questioned Costs Not applicable.