Finding Text
Reference Number 2024-006 Prepaid Expenses and Requests for Reimbursement (Federal and State)
Criteria:
Requests for reimbursement (RFRs) in connection with CACTX grants are submitted on a
monthly basis in accordance with the terms and requirements stipulated by the Center's
grantor, CACTX. Costs and associated activates must be incurred within the grant period and
specific claim period (month) to be eligible for reimbursement. Claimed costs must also be
allowable under the grant terms, Uniform Guidance and/or Texas Grant Management
Standards. Allowable direct costs applicable to a specific contract or funding source may be
claimed fromthat funding source at 100%. Other allowable costs benefiting multiple programs
or funding sources are subject to the Center's Cost Allocation Plan (CAP) as prescribed by
CACTX: calculated each month based upon the time and efforts of the organization's
personnel for the respective month. CAP rates are dynamic in nature and change frommonth
to month. Consequently, for a recurring or fixed monthly costs/expenses, including
amortization of prepaid contracts, the amount that may be claimed each month changes based
on each respective month's CAP.
Condition:
For the fiscal year under audit, the Center had 3 grant agreements in effect with CACTX: 1
VOCA (term October 1, 2023 - September 30, 2024) and 2 HHSC (terms September 1, 2023 -
August 31, 2024; September 1, 2024 - August 31, 2025). In review of VOCA and HHSC
expenses claimed in the Center's monthly RFR's, the following exceptions were noted for
payments made in connection with contracts:
- Contract period from January 10, 2024 - January 10, 2025, paid in-full in January 2024:
for both VOCA and HHSC, the Center's RFR claimed reimbursement for the entire
amount paid; however, the term of the contract extended beyond the grant periods for
both VOCA and HHSC.
- Contract period fromFebruary 7, 2024 - February 6, 2025, paid in-full in February 2024:
the Center's RFR claimed reimbursement for 8 months (VOCA) and 7 months (HHSC).
- Contract period from April 20, 2024 - October 19, 2024, paid in-full in April 2024: for
both VOCA and HHSC, the Center's RFR claimed reimbursement for the entire amount
paid; however, the term of the contract extended beyond the grant periods for both
VOCA and HHSC.
- Contract period from May 5, 2024 - May 4, 2025, paid in-full in May 2024: the Center's
RFR claimed reimbursement for 5 months (VOCA) and 4 months (HHSC).
- Contract period from August 1, 2024 - July 31, 2025, paid in-full in August 2024: the
Center's RFR appropriately claimed 1 month for HHSC; however, the RFR claim 2
months for VOCA (August and September). For VOCA, the September RFR claimed
the cost again, causing 3months to be claimed within a 2-month period. For HHSC, the
September RFR claimed 11 months of the contract.
Cause and Effect:
The Center did not adhere to the accrual basis of accounting required to be applied to costs
claimed on its monthly RFRs submitted to CACTX. Under the accrual method, prepaid
contracts should be amortized over the contract term (benefit period). Consequently, costs
were inappropriately included/excluded in the Center's monthly RFRs submitted to CACTX.
Questioned Cost: None reported
Repeat Finding: N/A
Recommendation:
It is recommended the Center evaluate and update its internal controls and procedures to
ensure costs are appropriately considered when preparing the Center's monthly RFRs.
Views of Responsible Officials: See management's corrective action plan