Finding Text
All Funding Sources Noncompliance Improper Charges to Federal Funded Reimbursable Grants Criteria Under CFR § 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards) and the respective federal grant agreements, only allowable, reasonable, and allocable costs actually incurred and supported by adequate documentation may be charged to a federal award. Reimbursement requests must be based on actual, recorded expenditures. Condition During our testing of expenditures charged to multiple federally funded reimbursable grants subject to the Uniform Guidance, we noted instances where the Organization billed and received reimbursement for costs that were not supported by actual underlying expenses. Specifically, reimbursement requests included amounts in excess of actual costs incurred, resulting in estimated over-reimbursements of approximately $15,000 during the period under audit. Cause The condition resulted from a breakdown in internal controls over the grant billing process, including inadequate reconciliation of reimbursement requests to the general ledger and supporting documentation, and insufficient oversight. Existing policies and procedures were not effectively implemented to prevent or detect improper charges to federal awards on a timely basis. Effect The Organization received excess federal grant reimbursements of approximately $15,000 to which it was not entitled and may be required to repay these amounts to the respective federal grantor agencies or pass-through entities. The risk was mitigated by management’s identification of the issue, prompt reporting to governance and the auditors, and immediate personnel and control actions. Recommendation We recommend that the Organization reconcile all affected federal grant reimbursement requests to underlying expenditures to determine the exact over-reimbursement amount and work with the applicable grantor(s) to return any unallowable costs. The Organization should strengthen controls over grant billings by requiring documented reconciliations to the general ledger and formal review and approval of all reimbursement requests, ensure appropriate segregation of duties, and provide training to relevant staff on Uniform Guidance cost principles and the Organization’s grant billing procedures. Management's Response Management concurs with the finding. Management is performing a comprehensive reconciliation of all affected federal grant reimbursements to actual expenditures and will work with the applicable federal agencies/pass-through entities to return unallowable amounts.