FAC Explorer

Finding 1157132 (2024-001)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
$1
Year
2024
Accepted
2025-09-30
Audit: 369464
Organization: Edna Martin Christian Center, Inc. (IN)
Auditor: Sikich CPA LLC

AI Summary

  • Core Issue: Some expenses charged to federal grants were not allowed under federal regulations.
  • Impacted Requirements: Compliance with 2 CFR Part 200, subpart E and 2 CFR 200.303 regarding allowable costs and internal controls.
  • Recommended Follow-Up: Management should enhance internal controls to ensure all expenditures comply with federal guidelines.

Finding Text

2024-001- Significant Deficiency: Activities Allowed or Unallowable Costs/Cost Principles Criteria: According to federal regulations, expenditures charged to federal grants must follow the allowable cost principles found in 2 CFR Part 200, subpart E. Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing of federal expenditures, we noted that certain expenses were not allowable activities under the Uniform Guidance. Cause: Internal controls surrounding the review of supporting documentation of expenditures charged to grants are not properly implemented to detect and correct errors. Effect: The Organization received reimbursement for unallowable expenditures. Questioned Costs: ALN 84.215J - $18,603 Recommendation: We recommend that management of the Organization review internal controls over compliance and ensure they are properly designed and implemented to ensure that expenditures are allowable under federal regulations. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.

Corrective Action Plan

The purchase of the grant management system will interface directly with the organization’s accounting software, allowing for the automated extraction of financial data. This data will be systematically mapped to the corresponding budgetary lines of each grant to ensure accurate tracking and reporting. On a monthly basis, the Financial Grant Coordinator will collaborate with Senior Directors and Program Directors to review financial activity. These reviews aim to verify that expenditure aligns with the allowable costs defined by each grant, ensuring full compliance with funding requirements. Corrective: Budget vs. actual reviews are conducted with senior directors to evaluate financial performance and ensure alignment with programmatic, administrative guidelines, and funding guidelines. During these reviews, directors assess which costs are permissible and identify any expenditure that falls outside allowable parameters. Non-compliant costs are reallocated to appropriate programs that permit such expenses or to administrative accounts as necessary.

Categories

Questioned Costs Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 1157133 2024-002
    Material Weakness Repeat
  • 1157134 2024-003
    Material Weakness Repeat
  • 1157135 2024-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.215 Innovative Approaches to Literacy; Promise Neighborhoods; Full-Service Community Schools; and Congressionally Directed Spending for Elementary and Secondary Education Community Projects $1.06M
16.827 Justice Reinvestment Initiative $280,000
84.287 Twenty-First Century Community Learning Centers $258,795
21.027 Coronavirus State and Local Fiscal Recovery Funds $231,577
84.424 Student Support and Academic Enrichment Program $72,594
97.024 Emergency Food and Shelter National Board Program $11,133
14.218 Community Development Block Grants/entitlement Grants $10,830