Finding Text
Finding No.: 2022-014 Federal Agency: U.S. Department of Education AL Program: 84.047A TRIO Upward Bound Federal Award No.: P047A171556-21 Area: Activities Allowed or Unallowed Area: Allowable Costs/Cost Principles Questioned Costs: $440 Criteria: In accordance with the applicable activities allowed or unallowed requirements, institutions must demonstrate that costs incurred are allowable under the relevant program legislation, federal awarding agency regulations, and the terms and conditions of the award and consistent with the purpose of the Upward Bound program. Federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and be adequately documented. 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. Conditions: 1. For fourteen (or 74%) of nineteen items, aggregating $1,599 of $82,998 in total non-payroll expenditures, deficiencies were noted, as follows: Item # Check# Description Expense Amount Questioned Cost 1 1034572 Stipends $ 20 $ 20 2 1034794 Stipends 35 35 3 1034826 Stipends 40 40 4 1035264 Stipends 40 40 5 1035279 Stipends 40 40 6 1035478 Stipends 40 40 7 1035755 Stipends 35 35 8 1036213 Stipends 15 15 9 1036214 Stipends 40 40 10 1036236 Stipends 40 40 11 1036566 Stipends 25 25 12 1036692 Stipends 30 30 13 1036948 Stipends 30 30 14 1038344 Stipends 55 55 $485 $485 There was no supporting documentation provided to ascertain whether such expenditures were allowable costs of the underlying grants. Only $245 questioned costs are reported at this finding as $240 questioned costs are included and reported at finding # 2022-016. 2. For three (or 7%) of forty-one items, aggregating $24,427 of $186,116 in total payroll expenditures, deficiencies were noted, as follows: Item # Check# Description Expense Amount Questioned Cost 1 49803 Salaries and wages and benefits $ 40 $ 40 2 50150 Salaries and wages and benefits 43 43 3 51131 Salaries and wages and benefits 112 112 $195 $195 There was no approved employment contract or other supporting documents on file to substantiate whether such expenditures were allowable costs of the underlying grants. Cause: The College lacks adequate internal controls over compliance with the applicable federal regulations relating to activities allowed or unallowed, specifically, obtaining and retaining sufficient documentation to support all transactions. Effect: The College is not in compliance with the applicable activities allowed or unallowed and allowable costs/cost principles requirements. Accordingly, total questioned costs of $680, of which $240 is reported at finding # 2022-016, result because the projected questioned costs exceed the $25,000 threshold. Recommendation: College management should improve internal control policies and strengthen controls requiring obtaining and retaining sufficient documentation to support all transactions. Views of Auditee and Planned Corrective Actions: The College agrees with the finding and provides details in its Corrective Action Plan.