Finding Text
Finding 2024-001 - Allowable Costs/Cost Principles
Identification of federal program: Assistance Listing No. 93-493 - Congressional Directives
Criteria or specific requirement: Section 200.406 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) provides the requirements for applicable credits. Applicable credits refer to tansactions are purchase discounts, rebates or allowances, recoveries or indemnities on losses, insurance refunds or rebates and adjustments of overpayments or erroneous charges. To the extent that such credits accruing to or received by the recipient or subrecipient relate to allowable costs, they must be credited to the Federal award either as a cost reduction or cash refund, as appropriate.
Condition: We noted an instance of a reimbursement that was not net of applicable credits.
Cause: The System does not have internal controls in place requiring supervisory review and approval for allowability and adherence to cost principles specifically related to reimbursement net of applicabable credits.
Effect or potential effect: Unallowable costs may have been charged to the program.
Questioned cost: $6,945 known.
Context: The System received funding that was not net of applicable credits. The funding received from the grantor was the full invoice amount, however, the actual expenditure was net of applicable credits ($6,945).
Recommendation: We recommend the System establish formal internal control policies and procedures requiring supervisory review and approval for allowability and adherence to cost principles specifically related to reimbursement net of applicable credits.
Views of responsible officials: The System concurs with this finding. See page 50 for corrective action plan.