Finding Text
Criteria Uniform Guidance requires that costs charged to federal awards be allowable, allocable, and in accordance with the terms and conditions of the award, including approved budgets and budget modification requirements. Condition and Context During the year ended December 31, 2024, certain unallowable costs, including utilities and telecommunications expenses, were charged to a federal program prior to obtaining approval for a budget modification. Management identified and corrected the costs prior to year-end during a review of program expenditures conducted after a change in executive leadership. The unallowable amounts were withheld from a subsequent reimbursement request after corrected information was submitted. Cause The Organization’s controls over review and approval were not sufficient to ensure that costs charged to the federal program were allowable and consistent with the approved budget prior to submission for reimbursement. Effect Unallowable costs were initially charged to the federal program, causing noncompliance with federal award requirements. Questioned Costs None. Repeat Finding From Prior Year This is not a repeat finding. Recommendation Management should enhance controls over cost allowability by implementing documented preventive review procedures, including independent review of reimbursement submissions prior to submission, to ensure costs charged to federal programs are allowable and consistent with approved budgets. Views of Responsible Official Management agrees with the audit finding. A corrective action plan has been developed and is included to address the identified deficiency