Finding 1148073 (2024-001)

Finding 2024-001 Significant deficiency in internal controls over compliance related to allowable costs/cost principles. Federal Agency: Department of the Treasury Program Title: COVID-19: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Numbers: CLFR-115A-4 Project Period: June 1, 2023 ‐ June 30, 2026 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart E section 2 CFR 200.406 requires that any applicable credits received by a recipient that relate to allowable costs must be credited to the Federal award by either a cost reduction or a cash refund. Condition/Context for Evaluation During the audit for the year ending December 31, 2024, we noted five instances out of 40 where the Organization charged the full costs of an expenditure to the grant and did not apply credits that were received by the Organization for early payment of the expenditure. This resulted in an overcharge to the award. Questioned Costs $78.45 Cause The Organization’s internal controls were not designed to ensure proper allocation of discounts for grant expenditures to the related award. Effect or Potential Effect Unallowable costs were charged to the grant as the costs were not net of discounts. Repeat Finding Not Applicable. Recommendation We recommend that management develop internal controls for appropriate application of credits to grant expenditures and review to ensure the appropriate costs, net of any discounts, were charged to the grant. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying management corrective action.