Finding 1130755 (2024-005)

Material Weakness
Requirement
B
Questioned Costs
$1
Year
2024
Accepted
2025-04-07
Audit: 352907
Organization: YWCA West Central Michigan (MI)

AI Summary

  • Core Issue: Costs charged to federal grants were not properly allocated, lacking support and consistent documentation.
  • Impacted Requirements: Compliance with federal regulations (2 CFR 200.405) on cost allocation was not met, leading to potential questioned costs.
  • Recommended Follow-Up: Implement procedures for cost allocation based on actual expenditures, ensuring proper documentation and annual reviews by management.

Finding Text

#2024-005 – Major Federal Award Finding – Allocation of Costs Nature of Finding: Compliance Finding Allowable Costs and Material Weakness in Internal Controls over Compliance Criteria/Condition: Federal regulations 2 CFR 200.405 provide that costs benefiting two or more projects in proportions that can be easily determined must be allocated to the projects based on the proportional benefit. If proportions cannot be easily determined, the costs may be allocated to the benefitted projects on a reasonable and documented basis. Questioned Costs: Not able to be determined. Identification of How Questioned Costs Were Computed: Of the non-payroll major program expenditures selected for testing, certain costs charged to the major program did not have proper support for the allocation percentages that were utilized, or they were missing documented approval for the allocation percentages. Some of the allocation percentages utilized were not consistent throughout the year. These matters are not isolated or contained to any particular type of expenditure. There was no meaningful methodology identified to quantify or extend the errors to the population. Cause/Context: Controls were not in place to evaluate the allocation of costs to grants based on proportional benefit provided to each grant. For 11 of the 40 non-payroll expenditures selected for testing, allocation percentages were not properly supported or were missing documented approval. Effect: Expenditures that involve an allocation of costs between grants are not properly supported. The lack of controls results in questioned costs as a disproportionate amount of expenditures may be charged to the federal program. Recommendation: We recommend management establish procedures and controls to allocate costs between grants based upon actual costs attributed to the grant and the particular expenditure allowed by the grant. Any such allocations should be supported by activity-level substantiation and be reviewed. Documentation of the allocation methodology, review and approval should be maintained. Views of Responsible Officials and Planned Corrective Actions Percentages used for allocations will be reviewed annually across all grants/programs and updated during the budget process. These allocations will be reviewed by the CFO.

Categories

Questioned Costs Allowable Costs / Cost Principles

Other Findings in this Audit

  • 554306 2024-004
    Material Weakness Repeat
  • 554307 2024-005
    Material Weakness
  • 554308 2024-004
    Material Weakness Repeat
  • 554309 2024-005
    Material Weakness
  • 554310 2024-004
    Material Weakness Repeat
  • 554311 2024-005
    Material Weakness
  • 554312 2024-004
    Material Weakness Repeat
  • 554313 2024-005
    Material Weakness
  • 554314 2024-004
    Material Weakness Repeat
  • 554315 2024-005
    Material Weakness
  • 554316 2024-003
    Material Weakness Repeat
  • 554317 2024-003
    Material Weakness Repeat
  • 554318 2024-003
    Material Weakness Repeat
  • 554319 2024-003
    Material Weakness Repeat
  • 554320 2024-003
    Material Weakness Repeat
  • 1130748 2024-004
    Material Weakness Repeat
  • 1130749 2024-005
    Material Weakness
  • 1130750 2024-004
    Material Weakness Repeat
  • 1130751 2024-005
    Material Weakness
  • 1130752 2024-004
    Material Weakness Repeat
  • 1130753 2024-005
    Material Weakness
  • 1130754 2024-004
    Material Weakness Repeat
  • 1130756 2024-004
    Material Weakness Repeat
  • 1130757 2024-005
    Material Weakness
  • 1130758 2024-003
    Material Weakness Repeat
  • 1130759 2024-003
    Material Weakness Repeat
  • 1130760 2024-003
    Material Weakness Repeat
  • 1130761 2024-003
    Material Weakness Repeat
  • 1130762 2024-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.558 Temporary Assistance for Needy Families $224,159
16.736 Transitional Housing Assistance for Victims of Domestic Violence, Dating Violence, Stalking, Or Sexual Assault $174,428
14.267 Continuum of Care Program $99,584
93.497 Family Violence Prevention and Services/ Sexual Assault/rape Crisis Services and Supports $96,446
93.671 Family Violence Prevention and Services/domestic Violence Shelter and Supportive Services $70,797
16.575 Crime Victim Assistance $69,993
16.017 Sexual Assault Services Formula Program $66,600
16.021 Justice Systems Response to Families $56,880
97.024 Emergency Food and Shelter National Board Program $7,500