Finding 1136393 (2024-002)

Finding 2024-002 Significant deficiency in internal controls over compliance related to allowable costs/cost principles compliance requirements. Federal Agency: Social Security Administration Program Title: Social Security State Grants for Work Incentives Assistance to Disabled Beneficiaries Assistance Listing Number: 96.009 Awards Number: PABSS: 4 PAB19020367-01-08; PABRP: 1 SPS23000102-01-00 & 5 SPS23000102-02-00 Award Period: PABSS: 10/01/2018 - 9/30/2024; PABRP: Both Awards - 08/01/2023 - 07/31/2028 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E require expenditures allocated to federal awards be supported by a system of internal controls which provides reasonable assurance that charges are accurate, allowable, properly allocated, and supported by adequate documentation. Condition/Context For the year ended September 30, 2024, in a sample of 25 payroll transactions, there were 6 instances of payroll costs being charged to the award that were not supported by proper documentation of the allocation applied. For the year ended September 30, 2024, in a sample of 40 non-payroll transactions, there were 7 instances of non-payroll costs being charged to the award that were not consistent with DRW’s policies and procedures, or consistent with other federal and non-federal awards. The 7 instances were erroneously charged to the award due to a coding error. Effect/Potential Effect DRW did not fully comply with the allowable cost principles as specified in Federal Regulations. As a result, there may be charges to the award that are not adequately supported with documentation and may be unallowable. Questioned Costs $536 - payroll $51 – non-payroll Cause DRW’s internal controls related to payroll and non-payroll costs allocation was not sufficient to prevent or detect errors in compliance with the standards and to ensure consistent treatment with policies and procedures. Repeat Finding Yes Recommendation We recommend that DRW implement internal controls to ensure that all costs charged to the federal awards are supported by proper documentation. Views of Responsible Officials Management agrees with the finding and has provided the corrective action plan following the Single Audit Report.