Finding 1152297 (2022-003)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2025-09-08
Audit: 365817
Organization: Abilities Network, Inc. (MD)

AI Summary

  • Core Issue: There are significant weaknesses in internal controls over payroll and disbursement allocations, leading to unsupported costs totaling $241,682.
  • Impacted Requirements: Compliance with federal regulations (2 CFR sections 200.303 and 200.407) regarding documentation and approval of allowable costs is not being met.
  • Recommended Follow-Up: Implement and monitor effective internal controls for allocations and ensure proper documentation is maintained to support all grant-related expenses.

Finding Text

2022-003 Allowable Costs – Payroll, Fringe, and General Disbursements Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Child Care and Development Block Grant Assistance Listing Number: 93.575 Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Material Non-Compliance Criteria: Recipients of federal funds are required to establish and maintain effective internal controls over federal funds received, per 2 CFR section 200.303. Allowable costs must be approved by the awarding agency (2 CFR section 200.407) and necessary and reasonable for the performance of the federal award and allocable under the principles of 2 CFR, Subpart E. Additionally, costs must be adequately documented. Condition: Direct costs incurred were allocated through journal entries to the grant without support of an allocation methodology. Management was unable to provide an understanding of how to trace the allocated amounts to a consistent methodology or to original source documentation. Additionally, credit card costs did not have proper evidence of approval maintained. Lastly, time and effort was not supported for one transaction for the amount charged to the grant. Context: Of the general disbursement population, $121,199 of general disbursements were booked via unsupported journal entry (allocated). Of the payroll and fringe benefit disbursement population, $120,483 were booked via unsupported journal entry (allocated). Lastly, one of the forty payroll transactions tested did not agree to the amount charged to the grant. Questioned Costs: $241,682 Cause: Internal controls surrounding allocations were not properly designed and implemented and an audit trail for allocation journal entries/source documentation was not maintained. Effect: The lack of evidence for audit trail and lack of effective internal controls over allocations provides an opportunity for noncompliance and errors. Repeat Finding: Yes Recommendation: We recommend that the Organization design, implement and monitor internal controls over allocations as well as maintain source documentation to support amounts charged to the grant. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding.

Categories

Questioned Costs Allowable Costs / Cost Principles

Other Findings in this Audit

  • 575847 2022-003
    Material Weakness Repeat
  • 575848 2022-003
    Material Weakness Repeat
  • 575849 2022-003
    Material Weakness Repeat
  • 575850 2022-003
    Material Weakness Repeat
  • 575851 2022-003
    Material Weakness Repeat
  • 575852 2022-003
    Material Weakness Repeat
  • 575853 2022-003
    Material Weakness Repeat
  • 575854 2022-003
    Material Weakness Repeat
  • 575855 2022-003
    Material Weakness Repeat
  • 575856 2022-003
    Material Weakness Repeat
  • 575857 2022-004
    Significant Deficiency
  • 575858 2022-004
    Significant Deficiency
  • 575859 2022-004
    Significant Deficiency
  • 575860 2022-004
    Significant Deficiency
  • 575861 2022-004
    Significant Deficiency
  • 575862 2022-004
    Significant Deficiency
  • 575863 2022-004
    Significant Deficiency
  • 575864 2022-004
    Significant Deficiency
  • 575865 2022-004
    Significant Deficiency
  • 575866 2022-004
    Significant Deficiency
  • 1152289 2022-003
    Material Weakness Repeat
  • 1152290 2022-003
    Material Weakness Repeat
  • 1152291 2022-003
    Material Weakness Repeat
  • 1152292 2022-003
    Material Weakness Repeat
  • 1152293 2022-003
    Material Weakness Repeat
  • 1152294 2022-003
    Material Weakness Repeat
  • 1152295 2022-003
    Material Weakness Repeat
  • 1152296 2022-003
    Material Weakness Repeat
  • 1152298 2022-003
    Material Weakness Repeat
  • 1152299 2022-004
    Significant Deficiency
  • 1152300 2022-004
    Significant Deficiency
  • 1152301 2022-004
    Significant Deficiency
  • 1152302 2022-004
    Significant Deficiency
  • 1152303 2022-004
    Significant Deficiency
  • 1152304 2022-004
    Significant Deficiency
  • 1152305 2022-004
    Significant Deficiency
  • 1152306 2022-004
    Significant Deficiency
  • 1152307 2022-004
    Significant Deficiency
  • 1152308 2022-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.870 Maternal, Infant and Early Childhood Home Visiting Grant $327,222
93.575 Child Care and Development Block Grant $176,726
93.630 Developmental Disabilities Basic Support and Advocacy Grants $30,927
14.218 Community Development Block Grants/entitlement Grants $22,701
93.434 Every Student Succeeds Act/preschool Development Grants $20,093