Finding Text
Federal Agency: U.S. Department of Veteran Affairs Federal Program Name: Supporting Services for Veteran Families Program Assistance Listing Number: 64.033 Federal Award Identification Number and Year: 14-IN-200, 14-IN-200-LT Award Period: October 1, 2022 – September 30, 2026 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award require compliance with the provisions of allowable costs. The Organization should have internal controls designed to ensure compliance with those provisions. Condition: Internal controls over compliance for allowable costs were not in place to support that the Organization was requesting reimbursement for costs allowable by the Federal Agency with respect to indirect costs. Questioned costs: $26,275 Context: During our testing, it was noted that there was no formal layer of review over the draw-down requests prepared by the senior accountant before it was submitted to the awarding agency. Amounts drawn did not consistently agree to known upcoming or previously incurred expenditures, and the amount of indirect costs applied to the amount drawn was based on a rate of 11.1% instead of 10% which is the maximum de-minimis rate allowed to be elected by the Organization. Cause: These Organization began using this rate during the year ended June 30, 2025 and is still gaining an understanding of proper application. Effect: The amounts reimbursed by the Federal Agency may by unallowable and result in a refund to the Federal Agency. Repeat Finding: No. Recommendation: We recommend the Organization design controls to ensure the draw down requests and related support are formally reviewed and approved by the Finance Director before submitting the request to the awarding agency and that the support is retained. Views of responsible officials: While there is listing on the U.S Department of Veterans Affairs website that there is a limit for SSVF indirect cost rates at 10%, there is interpretation of the calculation of the 10% and the most recent SSVF Audit approved the current maximum de-minimis rate and it was not a finding.