Finding 1215021 (2024-011)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2024
Accepted
2026-05-19

AI Summary

  • Core Issue: Direct charges for major improvements to real property are unallowable under UC program funding.
  • Impacted Requirements: Costs related to acquisition, construction, or major capital improvements cannot be charged directly; only properly calculated depreciation is allowed.
  • Recommended Follow-Up: Re-establish internal controls to monitor allowable expenses and ensure accurate reconciliation of costs with cash draws.

Finding Text

Finding: Direct charges for major improvements of real property. Criteria: Allowable Costs/ Cost Principles (Non-profit Organization) Per the Compliance Supplement for UC programs, improper direct charging of costs related to the acquisition, construction, or major capital improvements of real property is unallowable. Funding under this program cannot be directly used for any of these purposes as the program does not have statutory authority to do so. Expenses such as direct charges of acquisition costs, mortgage principal and interest payments, and direct charges for alterations to real property which are considered major capital improvements* and required to be capitalized and depreciated under GAAP, are unallowable as direct charges to the UC Program awards. Only depreciation properly calculated (see 45 CFR 75.436), recorded, and supported by the recipient organization in accordance with GAAP may be charged to UC Program awards. Condition and Context, and Cause: During our audit, noted to charges to the UC programs which were unallowable per the above criteria. See discussion above at 2024-006 additional context/cause. Result: Amounts identified as unallowable costs per the compliance guidance have been included in the contract liability as disclosed in Note 12. See the Summary of Unallowable Costs and Questioned Costs tables for detail on page 56. Recommendation: The auditors recommend the Organization re-implement internal controls to track allowable expenditures and reconcile qualifying costs with cash draws.

Corrective Action Plan

Cayuga Centers will confer with its auditors to ensure it has a full list of general ledger (GL) transactions regarding which these findings are asserted. For finding 2024-011, Cayuga Centers will assess whether each transaction does, in fact, represent a capital cost and will assess all such costs against program requirements and other relevant background documentation. For finding 2024-012, Cayuga will review relevant lease terms and program requirements. If, upon full evaluation, Cayuga Centers concurs that such costs were improperly charged, it will address the matter with its primary funding agency as part of broader resolution of any unallowable costs. For steps to resolve the underlying control deficiency asserted or implied in this finding, please see Cayuga Centers’ response to Findings 2024-001 through 006 above.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 1214969 2024-003
    Material Weakness Repeat
  • 1214970 2024-004
    Material Weakness Repeat
  • 1214971 2024-005
    Material Weakness Repeat
  • 1214972 2024-006
    Material Weakness Repeat
  • 1214973 2024-007
    Material Weakness Repeat
  • 1214974 2024-008
    Material Weakness Repeat
  • 1214975 2024-009
    Material Weakness Repeat
  • 1214976 2024-010
    Material Weakness Repeat
  • 1214977 2024-011
    Material Weakness Repeat
  • 1214978 2024-012
    Material Weakness Repeat
  • 1214979 2024-013
    Material Weakness Repeat
  • 1214980 2024-003
    Material Weakness Repeat
  • 1214981 2024-004
    Material Weakness Repeat
  • 1214982 2024-005
    Material Weakness Repeat
  • 1214983 2024-006
    Material Weakness Repeat
  • 1214984 2024-007
    Material Weakness Repeat
  • 1214985 2024-008
    Material Weakness Repeat
  • 1214986 2024-009
    Material Weakness Repeat
  • 1214987 2024-010
    Material Weakness Repeat
  • 1214988 2024-011
    Material Weakness Repeat
  • 1214989 2024-012
    Material Weakness Repeat
  • 1214990 2024-013
    Material Weakness Repeat
  • 1214991 2024-003
    Material Weakness Repeat
  • 1214992 2024-004
    Material Weakness Repeat
  • 1214993 2024-005
    Material Weakness Repeat
  • 1214994 2024-006
    Material Weakness Repeat
  • 1214995 2024-007
    Material Weakness Repeat
  • 1214996 2024-008
    Material Weakness Repeat
  • 1214997 2024-009
    Material Weakness Repeat
  • 1214998 2024-010
    Material Weakness Repeat
  • 1214999 2024-011
    Material Weakness Repeat
  • 1215000 2024-012
    Material Weakness Repeat
  • 1215001 2024-013
    Material Weakness Repeat
  • 1215002 2024-003
    Material Weakness Repeat
  • 1215003 2024-004
    Material Weakness Repeat
  • 1215004 2024-005
    Material Weakness Repeat
  • 1215005 2024-006
    Material Weakness Repeat
  • 1215006 2024-007
    Material Weakness Repeat
  • 1215007 2024-008
    Material Weakness Repeat
  • 1215008 2024-009
    Material Weakness Repeat
  • 1215009 2024-010
    Material Weakness Repeat
  • 1215010 2024-011
    Material Weakness Repeat
  • 1215011 2024-012
    Material Weakness Repeat
  • 1215012 2024-013
    Material Weakness Repeat
  • 1215013 2024-003
    Material Weakness Repeat
  • 1215014 2024-004
    Material Weakness Repeat
  • 1215015 2024-005
    Material Weakness Repeat
  • 1215016 2024-006
    Material Weakness Repeat
  • 1215017 2024-007
    Material Weakness Repeat
  • 1215018 2024-008
    Material Weakness Repeat
  • 1215019 2024-009
    Material Weakness Repeat
  • 1215020 2024-010
    Material Weakness Repeat
  • 1215022 2024-012
    Material Weakness Repeat
  • 1215023 2024-013
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.676 UNACCOMPANIED ALIEN CHILDREN PROGRAM $5.28M
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $260,463