Finding Text
Condition: During our audit procedures over expenditures charged to the federal program, we tested a nonstatistical sample of 40 transactions. Audit procedures identified one expenditure that was not allowable, as the cost was incurred prior to the start date of the grant period, but was charged to the federal award. Criteria: Under 2 CFR §200.403, costs charged to federal awards must be allowable, allocable, reasonable, and incurred during the approved period of performance of the award. Cause: The cause of the finding was insufficient review procedures to ensure that expenditures charged to the federal award were incurred within the approved grant period. Transaction dates were not consistently verified against grant start dates prior to charging costs to the award. Effect: Charging costs incurred outside the grant period results in noncompliance with federal cost principles and increases the risk that additional unallowable costs could be charged to federal programs. This resulted in questioned costs of $455 related to the transaction tested. Questioned Costs: $455 Recommendation: We recommend that management enhance procedures over the review and approval of grant expenditures to ensure that costs are incurred within the approved grant period prior to being charged to the federal award. This may include verifying invoice or expenditure dates against grant start and end dates as part of the approval process.