Finding Text
FINDING 2024‐001 – Matching, Level of Effort, Earmarking;
Significant Deficiency in Internal Control over Compliance
U.S. Department of the Treasury
Assistance Listing Numbers: 21.027
Federal Program Names: Coronavirus State and Local Fiscal Recovery Funds Program
Award Year: Fiscal Year 2022
Criteria: Per 2 CFR § 200.306, the non-federal entity must provide required matching contributions in accordance with the terms and conditions of the federal award. Contributions must be verifiable from the recipient’s records, not be included as contributions for any other federal award, be necessary, and reasonable.
Condition and context: During our testing of matching, level of effort, and earmarking, one reimbursement request included all expenditures for reimbursement on the A-19, though the 10% match should have been excluded in accordance with the grant agreement. This was caught by the State of Washington Department of Commerce and subsequently corrected prior to disbursement of the reimbursement request. This was the only instance of noncompliance noted within the sample of 28, of which 25 were randomly selected and 3 were supplemented as they were material to the program.
Questioned costs: None.
Effect: Without internal controls that are designed and implemented appropriately, an error could occur and result in questioned costs or the need to repay a portion of the federal award.
Cause: This was very early in the process of managing federal funding for the Association. Internal controls were not adequate to catch the error, which occurred because of a lack of experience relating to grant management within the Association.
Repeat finding: No.
Recommendation: We recommend that management implement procedures to ensure the matching expenditures are appropriately excluded from the reimbursement requests prior to submission, and in compliance with 2 CFR § 200.306 prior to being reported. Additional training could benefit the Association’s understanding of grant management and improve internal control processes as a result.
Views of responsible officials and planned corrective actions: Management has implemented a formalized checklist for preparing reimbursement requests, which includes a step to verify exclusion of the 10% match. Manual calculations are performed on each match submittal form to verify the requested amount excludes the 10% match. All reimbursement requests are now subject to a dual review and approval process before submission to the granting agency. This was implemented March 2024.
Contacts:
Betty Buckley, Executive Director
Maranda Davis, Grant Management Assistant