Finding Text
Finding No.: 2022-011 Pass-Through Entity: Republic of the Marshall Islands Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social and Political Development of the Territories Federal Award No.: Compact of Free Association Program, As Amended Area: Period of Performance Questioned Costs: $6,443 Criteria: The terms of the sub-awards administered by RepMar under the Compact of Free Association grant awards stipulate the period of performance during which time only costs resulting from obligations of the funding period may be charged. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the COSO. Condition: For thirty-five (or 61%) of fifty-seven items, aggregating $20,314 of $418,739 in total payroll expenditures, the following costs of salaries charged to the program were incurred prior to the funding period stipulated in the grant awards: Item # Check # Check Date Description Expense Amount Questioned Cost 1 49423 10/08/21 Salaries $ 148 $ 148 2 49424 10/08/21 Salaries 29 29 3 49671 10/08/21 Salaries 30 30 4 49662 10/08/21 Social Security Tax 10 10 5 49664 10/08/21 Social Security Health Fund 19 19 6 49600 10/08/21 Salaries 1,128 1,128 7 49536 10/08/21 Salaries 752 752 8 49544 10/08/21 Social Security Tax 68 68 9 49543 10/08/21 Social Security Health Fund 19 19 10 49989 10/22/21 Salaries 171 68 11 49992 10/22/21 Social Security Tax 10 4 12 49967 10/22/21 Social Security Health Fund 5 2 13 49975 10/22/21 Social Security Health Fund 6 2 14 49936 10/22/21 Salaries 1,262 505 15 49918 10/22/21 Salaries 1,235 494 16 49954 10/22/21 Salaries 833 333 17 49940 10/22/21 Social Security Tax 86 34 18 49929 10/22/21 Social Security Health Fund 41 17 19 49816 10/22/21 Social Security Health Fund 3 1 20 49839 10/22/21 Social Security Health Fund 2 1 21 49881 10/22/21 Social Security Health Fund 30 12 22 50099 10/22/21 Salaries 2,100 840 23 50077 10/22/21 Salaries 800 320 24 50084 10/22/21 Salaries 2,100 840 25 50085 10/22/21 Social Security Tax 150 60 26 50087 10/22/21 Social Security Tax 180 72 27 50069 10/22/21 Social Security Tax 90 36 28 50073 10/22/21 Social Security Tax 180 72 29 50081 10/22/21 Social Security Tax 210 84 30 50069 10/22/21 Social Security Tax 60 24 31 50047 10/22/21 Social Security Tax 84 34 32 50101 10/22/21 Social Security Tax 324 130 33 49862 10/22/21 Salaries 502 201 34 49866 10/22/21 Social Security Health Fund 27 11 35 50050 10/22/21 Social Security Health Fund 106 43 $12,800 $6,443 Cause: The College lacks adequate internal controls over compliance with the applicable federal regulations relating to period of performance. Effect: The College is not in compliance with the applicable period of performance requirements. Accordingly, questioned costs of $6,443 result because the projected questioned costs exceed the $25,000 threshold. For item #s 10 through 25, only $4,240 is included in the total questioned costs, which relates to costs incurred prior to the funding period stipulated in the grant awards. Identified as a Repeat Finding: 2021-008 Recommendation: College management should improve internal control policies and strengthen controls to comply with the applicable period of performance requirements. Specifically, review should be made to ensure all costs charged to the program are within the funding period stipulated in the grant awards. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.