Finding Text
Finding: 2025-004 MATERIAL WEAKNESS & NON-COMPLIANCE Allowable Costs/Cost Principles Community Services Block Grant AL #93.569 Community Services Block Grant Criteria: All costs charged to federal programs must be allowable and in accordance with the cost principles set forth in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR Part 200, Subpart E, as well as the specific regulations of each federal program. Salary costs charged to a federal program must be supported by time records that accurately reflect the work performed Indirect costs allocated to the Community Services Block Grant (CSBG) program may not exceed the maximum allowable amount under the Agency’s negotiated indirect cost rate agreement. Condition: The Agency experienced turnover in the Finance Officer position at the end of February 2025. A CSBG financial technician assumed the role of Interim Finance Officer on March 1, 2025. From March 1 through June 30, 2025, the majority of the Interim Finance Officer’s salary was charged directly to the CSBG program. Timesheets for this period reflected eight hours per day spent working on CSBG activities and did not accurately reflect time spent on HUD programs or Management and Administrative (M&A) activities. In addition, the Agency charged the CSBG program indirect costs in excess of the allowable amount. Cause: These issues resulted from oversight and misunderstandings of program regulations and the cost principles outlined in the Uniform Guidance. Effect: The Agency charged unallowable costs to the CSBG program. Identification of a Repeat finding: This is not a repeat finding. Questioned Cost: $32,565 Recommendation: We recommend that management obtain training regarding allowable costs/cost principles set forth in the Uniform Guidance, 2 CFR Part 200, Subpart E, and applicable CSBG regulations. Management Response: Management agrees with this finding and recommendation.