Finding Text
Significant deficiency in internal controls over compliance with allowable costs/cost principles compliance requirements. Federal Agency: Department of Labor Program Title: WIOA Cluster Assistance Listing Number: 17.259 Award Number: 24-124-OSY; 24-108-ISY Award Period: July 1, 2024 through June 30, 2025 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E requires that costs charged to federal awards be supported by adequate documentation and represent charges for allowable costs. Condition/Context for Evaluation In a sample of 25 payroll selections, we noted three charges made to federal awards for which there were errors in intervening calculations that resulted in incorrect amounts being charged to Federal awards. Cause The Clubs’ internal controls did not include sufficient review of intervening calculations in accumulating costs to be invoiced. Effect or Potential Effect The Clubs did not fully comply with the allowable costs principles as specified in 2 CFR 200, Subpart E. As a result, there may be charges to awards that do not have adequate support. Questioned Costs No known questioned costs. Known errors resulted in amounts undercharged to federal awards. Repeat Finding Not applicable. Recommendation We recommend that the Clubs implement the necessary internal controls to ensure sufficient review of intervening calculations are performed and costs charged to federal awards are based on actual expenses incurred and paid and are supported by adequate documentation. Views of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.