Finding Text
Information on the Federal Program(s): 10.760 Water and Waste Disposal Systems for Rural Communities, Department of Agriculture Compliance Requirements: Allowable Costs and Costs Principles. Type of Finding: Material Noncompliance. Criteria: 2 CFR § 200.302(b)(7) requires that each non-Federal entity must provide for written procedures for determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles and the terms and conditions of the Federal award. Condition: We noted that the City did not have written procedures for determining the allowability of costs and the terms and conditions of the Federal award during fiscal year 2023. Cause: The City was not aware of the requirement to have written procedures for determining the allowability of costs and the terms and conditions of the Federal award. Effect: Failure to have written procedures for determining allowability of costs and the terms and conditions of the Federal award could result in costs charged to the program that are not allowable costs as defined by the appropriate cost principles circular and noncompliance with Uniform Guidance requirements and terms and conditions of the Federal award. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the City identify grants that are subject to Uniform Guidance on a timely basis to ensure all compliance requirements are met and develop written procedures where required. Views of Responsible Officials and Planned Corrective Action: The City has identified federal grants subject to the Uniform Guidance and will develop written procedures for determining the allowability of costs in accordance with 2 CFR 200, Subpart E—Cost Principles and the terms and conditions of the Federal award.