Finding Text
Activities Allowed or Unallowed; Allowable Costs/Cost Principles Identification of federal programs: Water & Waste Disposal Systems for Rural Communities (ALN 10.760) Criteria: Per 7 CFR 1780, Section 1780.9, loan and grant funds may be expended on eligible project costs as approved by RUS. Condition: During testing, we noted a transaction charged to the program with unallowable costs. Questioned costs: N/A Effect: The City is not in compliance with allowable activities/costs requirements Context: Of a population of 36, 4 transactions were selected for testing. In this testing, we noted 1 transaction that contained unallowable costs. Cause: The City did not have adequate controls in place to ensure only allowable costs are charged to federal programs. Repeat finding: No Recommendation: We recommend the City implement policies and procedures to ensure only allowable costs are being charged to federal grants. Views of responsible officials of the auditee: When Specials were printed, they were printed twice for 2 projects - 2022-1 and 2022-2 – all costs went to 2022-2 where there were grant funds used rather than ½ to 2022-1 and 2022-2. Even if not the most cost effective, grant projects and non-grant projects should not have combined invoices.