Finding 1148798 (2024-001)

• Federal Grantor – U.S. Department of Agriculture • Pass-Through Grantor – State of Connecticut Department of Education • Federal Program Name – Child and Adult Food Care Program • Federal Assistance Listing Number – 10.558 • Finding Type – Material Weakness in Internal Control over Major Programs • Compliance Requirement – Activities Allowed or Unallowed and Allowable Costs/Cost Principles • Criteria – Title 2 of the Code of Federal Regulations (CFR) Part 200 establishes cost principles for determining costs applicable to federal awards. These principles include the requirement that cost allocation methodologies be reasonable and documented and that all expenses charged to federal awards are appropriately supported. • Condition – The organization does not have a comprehensive cost allocation plan and what was documented was not always applied consistently throughout the year. • Cause – Not enough emphasis is placed on the importance of controls and documentation. • Effect – Costs that were allocated to the federal award were made based on unsupported allocation methodologies that were also not consistently applied. As a result, costs may have been incorrectly charged to the federal award. • Questioned Costs – Unknown • Repeat Finding – Yes (first reported as Finding #2022-002) • Recommendation – Management needs to enhance its written cost allocation plan and allocations being used must be demonstrated to be reasonable and applied consistently. • Views of Responsible Officials – Management agrees with the finding. The cost allocation plan will be updated and documented.