Finding Text
Information on the Federal Program: Assistance Listing Number 21.027 – Coronavirus State and Local Fiscal Recovery Funds, U.S. Department of the Treasury. Pass-Through Entities: State of Delaware and City of Dover, Delaware. Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Reporting. Type of Finding: Material Noncompliance.
Criteria: Program requirements state that a grantee may use funds for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021.
Condition: For the year ended December 31, 2023, we reviewed support for program expenditures and noted that certain support produced and submitted to the recipient were fraudulent. This issue was also identified and reported in the prior year as Finding 2022-003.
Cause: A breakdown in internal controls, further discussed in Note M to the financial statements enabled the fraudulent misappropriation of program funds.
Effect or Potential Effect: As a result, the Organization was not in compliance with program requirements for the year ended December 31, 2023.
Questioned Costs: $32,000
Context: Of the $2,370,217 of federal expenditures relating to this program, $32,000 represented fraudulent expenditures. All fraudulent expenditures relating to this program took place within the Health Services Grant received as a subrecipient through the City of Dover, Delaware. The cumulative amount of fraudulent expenditures relating to this program for the years ended December 31, 2023 and 2022 amounted to $45,600.
Repeat Finding: This condition was previously reported as finding 2022-003, which has not been adequately addressed during 2023.
Recommendation: Whisman, Giordano & Associates recommendation was to redefine the entire accounting and control system.