Finding Text
Finding 2024‐001: Matching – Significant deficiency in internal controls over compliance and compliance finding. Continuum of Care Program ALN 14.267 Criteria: Per 2 CFR § 200.306, non‐federal entities are required to provide the level of matching (cost sharing) specified in the terms and conditions of the federal award. Matching contributions must be verifiable from the non‐federal entity’s records, not be included as contributions for any other federal award, and be necessary and reasonable for accomplishment of program objectives. Condition: During matching testing, the auditor noted the Organization did not meet the required 25% matching contribution specified in the award agreement. Questioned Costs: $21,917, representing the shortfall in matching contributions. Cause: In January and February of 2024, the Organization was transitioning from being a program of CitySquare to becoming an independent 501(c)(3). Following the transition, two staff members previously allocated to the match departed in September 2024, and their associated match was not reassigned. Effect: The Organization’s matching contributions did not meet the grant requirement in accordance with its internal control procedures over compliance. Failure to meet the required matching contribution may result in noncompliance with the terms and conditions of the federal award and could impact the allowability of federal expenditures claimed. The full amount of the federal expenditures may be subject to disallowance by the awarding agency. Recommendation: Management should implement controls to strengthen its grant management procedures to ensure all matching requirements are clearly understood, budgeted for, and monitored regularly. This includes assigning responsibility for tracking match contributions and reconciling them periodically to ensure compliance throughout the grant period. Management’s Response: See corrective action plan.