Finding Text
2025-002 (Significant Deficiency) – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Program: AL 10.565, 10.568, and 10.569 Food Distribution Cluster Criteria: Per Uniform Guidance 2 CFR section 200.442, costs for fundraising that are not specifically related to the federal award are unallowable. Condition: Costs of t-shirts used for fundraising was included in the population of expenses allocated to the grant. Cause: Management oversight Effect: The Organization charged unallowable expenses to the grant. Context: As part of the single audit testing, 40 transactions were selected for testing. One invoice tested was for t-shirt costs for the Organization’s 40th Anniversary. Half the t-shirts were used for fundraising purposes. This is considered unallowable costs as it is costs for fundraising that is not specifically related to the federal award. Questioned Costs: $841 – half of invoice amount for 40th celebration t-shirts. Repeat Finding: Yes. Prior audit finding 2024-002. Recommendation: The Organization should review their policies and procedures for allocating expenses to grants and only charge allowable expenses. View of Responsible Officials: Management agrees with the recommendation and will review their procedures for allocating expenses