Finding Text
ACTIVITIES ALLOWED OR UNALLOWED, ALLOWABLE COSTS/COST PRINCIPLES - VARIOUS Finding Type: Significant Deficiency in Internal Controls over Compliance, Noncompliance ALN/CSFA and Program Title: 93.658 – Foster Care - Title IV-E Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Big Bend Community Based Care, Inc. dba NWF Health Network; Children’s Network of Hillsborough; Children’s Network of Southwest Florida Social Services; Communities Connected for Kids; Community Partnership for Children; Embrace Families, Inc.; Families First Network, Inc.; Family Support Services of Suncoast; Heartland for Children; Kids Central, Inc.; Partnership for Strong Families; Safe Children Coalition, Inc. Contract Number: 0299-22, C0900, PCM776, N/A (Emergency Shelter) Criteria: Under 2 CFR Part 200 of the Uniform Guidance, costs should be allocated in the accounting system among grants. Per the Organization’s policies and procedures, certain costs that benefit all programs should be allocated using allocation percentages that are calculated semi-annually. Additionally, 2 CFR 200.303(a) of the Uniform Guidance requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The auditor tested 40 program expenses and noted the following: 1. For 1 expense, the wrong allocation percentages were used to allocate the costs for the period. 2. For 1 credit card expense, the Organization did not have adequate supporting documentation. 3. For 2 expenses, the costs are considered to be unallowable entertainment costs. This was not a statistically valid sample. Cause: 1. Inadequate management review of allocations used for the costs. 2. Management approval of credit card charges that are not supported by receipts or other documentation, or the Organization not maintaining the supporting documentation. 3. Inadequate management review of costs that are allowable vs. unallowable for the program. Effect: Incorrectly allocated, unsupported, and unallowable costs were charged to the program, which could result in the grantor requiring repayment. Questioned Costs: Known questioned costs total $952, determined by calculating difference between the costs allocated to the program and the costs that should have been allocated to the program using the allocation percentages in effect at the time the expenses occurred, and by totaling unsupported and unallowable costs. Likely questioned costs total $53,895, determined by dividing the known questioned costs by the total of the sample and applying the error rate to the population of expenditures. Recommendation: We recommend management more specifically review the allocations used when reviewing costs that are allocated among programs, that management ensure all credit card charges are adequately supported and not charge unsupported costs to federal awards, and that management gain a better understanding of allowable and unallowable costs for the program and ensure unallowable costs are not charged to the program. Views of Responsible Officials and Planned Corrective Actions: See management’s response and Corrective Action Plan on page 57.