Finding Text
Federal Agency: U.S. Department of Health and Human Services AL Program: 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award No.: 1B08TI084652-01, 6B08TI084652-01M001, 6B08TI084652-01M002, 1B08TI083457-01, 6B08TI083457-01M001, 6B08TI083457-01M002, 6B08TI083457-01M003 and 6B08TI083457-01M004 Area: Period of Performance Questioned Costs: $147,206 Criteria: In accordance with the grant terms and conditions, funds awarded under the grant must be obligated and expended within the project period of performance. In addition, recipients must liquidate all obligations incurred under an award not later than ninety (90) days after the end of the award obligation and expenditure project period. Condition: 1. Of twenty-four expenditures tested for grant awards 1B08TI084652-01, 6B08TI084652-01M001 and 6B08TI084652-01M002, aggregating $15,426 of a total population of $61,833, for eighteen (or 75%), the FSM National Government was unable to provide supporting documents, such as purchase orders, contracts and/or cancelled checks, to support that expenditures were obligated/incurred within the period of performance end date of 09/30/23 and that were liquidated within the 90 days liquidation period. 2. Costs amounting to $132,758 were charged to grant awards 1B08TI083457-01, 6B08TI083457-01M001, 6B08TI083457-01M002, 6B08TI083457-01M003 and 6B08TI083457-01M004 with period of performance end date of 09/30/22. Grant extension documentation was not provided, for which the amount is questioned. Cause: 1. The FSM The FSM National Government did not provide sufficient and appropriate audit evidence to substantiate the expenditures over compliance with applicable period of performance requirement; 2. Inadequate monitoring controls in place to ensure that expenditures are obligated/incurred within the period of performance and liquidated within the liquidation period; and 3. Lacks monitoring control over adequate documentation and systematic filing of relevant documentations supporting program costs. Effect: The FSM National Government is in noncompliance with applicable period of performance requirements and questioned cost of $147,206 result. Recommendation: 1. The FSM National Government should strengthen and enforce compliance with the applicable period of performance requirements. 2. Establish and implement monitoring controls over the verification of period of performance ending dates prior to incurring and charging costs to a grant award and that such verification be adequately documented. 3. Establish and implement systematic filing of relevant documentation support program costs for easy retrieval. Views of Responsible Officials: Management disagrees with the finding. Refer to FSM NG’s Views of Responsible Officials for their detailed response. Auditor Response: In accordance with the grant terms and conditions for grant awards 1B08TI083457-01, 6B08TI083457-01M001, 6B08TI083457-01M002, 6B08TI083457-01M003 and 6B08TI083457-01M004, recipients must liquidate all obligations incurred under an award not later than ninety (90) days after the end of the award obligation and expenditure period. It further states that SAMHSA does not approve extensions to the ninety (90) day post-award, therefore, recipients are expected to complete all work and reporting within the approved project period and the aforementioned 90-day post-award reconciliation/liquidation period. The period of performance end date was on 09/30/22 while the liquidation period end date was on 12/29/22. No approved grantor extension documentation was provided. Further, during our audit finding resolution meeting on 12/09/25, the FSMNG management acknowledged that the grant expired on 09/30/22; however, they continued charging and drawing down from the expired grant as the PMS system still allowed to drawdown funds.