Finding Text
Allowable Costs/Cost Principles Criteria: In accordance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Companies expending federal funds must maintain sufficient documentation to support that costs charged to federal awards are allowable, allocable, and reasonable. Internal controls should ensure that complete and accurate supporting documentation is retained for all cash disbursements submitted for reimbursement. Condition: The Organization's internal control procedures around maintenance of documentation is not sufficient to ensure that costs submitted for reimbursement were allowable costs. Questioned Costs: None noted above the reportable threshold. Context: A sample of forty cash disbursements were selected for testing. For one of the sampled monthly expenditures, the Organization was unable to provide the underlying calculation supporting the amount billed to the federal award. Effect: Without proper document retention, the Organization incorrectly calculated the amount to charge to the federal program. Cause: The Organization did not retain proper documentation of invoices or calculations for transactions charged to the federal awards, as outlined in the internal controls manual. Recommendation: The Organization should develop formally documented internal control procedures to ensure that records are maintained for an appropriate amount of time. View of Responsible Officials and Planned Corrective Actions: The Organization's inability to properly retain documentation relating to the noted selection was due in large part to rapid staff turnover at the senior level and an inability to access records from previous employees. Following the 2024 grant year, the Organization made updates to the accounting manual and segregation of duties protocols to ensure redundancy in the event of staff turnover. Additionally, the Organization has instituted new document storage and record keeping practices including the use of Google Drive and DropBox to securely store critical records and ensure access by relevant financial staff. At all times, at least two current staff members maintain access to record keeping digital drives and folders to ensure access redundancy. These policies and practices were first implemented in the beginning of the 2026 fiscal year and remain ongoing.