Finding Text
Department of Housing and Urban Development Continuum of Care, Federal Financial Assistance Listing 14.267, Federal awards MN0308L5K012310, MN0203L5K002308, MN0203L5K002409, MN0399L5K012306, MN0448L5K002203, and MN0448L5K002304 included under Federal Financial Assistance Listing 14.267 on the Schedule Earmarking Material Weakness in Internal Control Over Compliance and Noncompliance 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 earmarking; however, the procedures failed to detect that administrative costs billed exceeded the 10% allowed under uniform guidance. Cause: Catholic Charities did not have adequate internal controls in place to ensure that the administrative costs were appropriately billed as allowed under uniform guidance. Effect: Inadequate internal controls over compliance could result in noncompliance with the federal program. Questioned Costs: MN0308L5K012310 for $7,709; MN0203L5K002308 for $1,480; MN0203L5K002409 for $139; MN0399L5K012306 for $5,679; MN0448L5K002203 for $1,065; and MN0448L5K002304 for $1,234 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 administrative costs are correctly calculated and billed. Views of Responsible Officials: Management agrees with the finding.