Finding Text
Finding No.: 2023-015 Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Compact of Free Association, As Amended Questioned Costs: $22,743 Area: Period of Performance Criteria: Grant agreements stipulate the period of performance during which time only costs resulting from obligations of the funding period may be charged. Furthermore, 2 CFR 200.303(a) states that a recipient of a Federal award must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition 1: For 1 (or 8%) of 13 transactions tested aggregating $30,782 of $733,055 non-payroll expenditures, the vendor invoice was not provided to verify that the cost was not incurred prior to the funding period stipulated in the grant award. Item # Fund # Voucher # Encumbrance # Total 1 10408 22/00001585 JOURNAL F0178101 $ 1,655 Condition 2: For 4 (or 9%) of 44 transactions tested aggregating $312,418 of $7,510,168 in non-payroll expenditures, the vendor invoice was not provided to verify that the cost was not incurred subsequent to the funding period stipulated in the grant award. Item # Fund # Voucher # Encumbrance # Total 1 10401 22/00003877 INVOICE 22/00002357 PORDER $ 355 2 10401 22/00003876 INVOICE 22/00002214 PORDER 111 3 10409 22/00003970 INVOICE 22/00001885 PORDER 320 4 10406 22/00010031 PV 22/00002158 BRV 20,302 $ 21,088 Condition 3: Expenditures totaling $2,050,741 were charged to grant award nos. D23AF00042-00 and D23AF00074-00 utilizing a single project code (SPG # 70110100). The two grant awards have different periods of performance. Compliance with period of performance requirements related to award no. D23AF00074-00 for costs totaling $688,542 could not be ascertained. Questioned costs, if any, that may result from this condition are not determinable. Condition 4: For the Four Atolls Health Care program, the applicable grant agreement covering the period from 10/01/2022 to 01/31/2023 was not made available. Therefore, compliance with period of performance requirements could not be ascertained. Questioned costs, if any, that may result from this condition are not determinable. Cause: RepMar did not effectively maintain documentation and did not establish a unique project code for each grant award to verify compliance with period of performance requirements. Effect: RepMar is in noncompliance with applicable period of performance requirements. Accordingly, questioned costs of $22,743 result from conditions 1 and 2 because the projected questioned cost exceeds the $25,000 threshold. Identification as a Repeat Finding: Finding No. 2022-005 Recommendation: RepMar should implement adequate internal control policies and procedures requiring retention of documentation to support all transactions and establish a unique project code for each grant award. Views of Responsible Officials: RepMar’s Corrective Action Plan does not indicate disagreement and provides planned corrective action.