Finding Text
2025-001 Costs Incurred Beyond the Period of Performance Program Name/Assistance Listing Number: 93.788 Opioid STR Federal Agency: Department of Health and Human Services Type of Finding: Significant Deficiency Compliance Requirement: Period of Performance Criteria: According to 2 CFR §§200.1, 200.308, 200.309, 200.344, and 200.403(h), a non-Federal entity may only charge allowable costs incurred during the approved budget period of the Federal award’s period of performance, and any costs incurred before the Federal award was made that were authorized by the Federal awarding agency or pass-through entity. All financial obligations incurred under the Federal award must be liquidated within the required time period. Costs incurred outside the approved period of performance are unallowable and constitute questioned costs. Condition: During cash disbursement testing, it was identified that costs totaling $56,017.62 were incurred after the end of the period of performance (which ended on September 30, 2024; grant ID 2401119 SOR 3.0 – SOS). Although the expenditures were allowable in nature, they were outside the approved period and therefore did not comply with the grant terms. Cause of Condition: The expenditures were incurred after the period of performance, possibly due to timing of invoicing. There was insufficient monitoring or review to ensure that all expenses were properly charged within the approved period. Potential Effect of Condition: The following are the potential effect based on the findings noted above: a. Non-Compliance: The Organization is at risk of non-compliance with the funding agreement, which may lead to questioned costs or repayment obligations. b. Financial Oversight Risk: Continued occurrence may indicate a lack of internal controls ensuring compliance with grant period requirements. Questioned Cost: $56,017.62 Recommendation: We recommend the following: a. Implement a monitoring process to ensure that all costs are incurred within the approved period of performance. b. Document and maintain a checklist of allowable expenses by period to prevent future occurrences of similar issues. Description of the Nature and Extent of Issues Reported: All expenditures outside the period of performance were identified during testing. The total known questioned cost is $56,017.62, which exceeds the $25,000 threshold for reporting under 2 CFR §200.516(a)(3). Management Response: Management concurred with the finding. During the current fiscal year, the Organization has implemented additional controls to ensure that all grant funding is expended within the timeframe allotted