Finding Text
Department of Housing and Urban Development Continuum of Care, Federal Financial Assistance Listing 14.267, Federal awards MN0308L5K012209, MN0203L5K002308, MN0399L5K012205, MN0448L5K002203, MN0457L5K012203, and MN0449L5K002302 included under Federal Financial Assistance Listing 14.267 on the Schedule Activities Allowed or Unallowed/Allowable Cost Principles and Period of Performance Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Catholic Charities has documented review procedures that conform to applicable federal standards regarding indirect expenses; however, the procedures failed to detect that indirect costs were billed at the wrong rate as allowed under uniform guidance. Cause: Catholic Charities did not have adequate internal controls in place to ensure that the de minimis rates were appropriately billed as allowed under uniform guidance. Effect: Inadequate internal controls over compliance could result in noncompliance with the federal program. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of three months out of 12 were selected for testing. Repeat Finding from Prior Year(s): No. Recommendation: We recommend Catholic Charities enhance internal control procedures to ensure all indirect cost are correctly calculated and billed. Views of Responsible Officials: Management agrees with the finding.