Finding Text
Federal agency: U.S. Treasury Department Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.019 Pass-Through Agency: Prince William County Pass-Through Number(s): 117203461 Award Period: 3/11/2022 – 12/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Indirect costs must be fully allocated across multiple areas (functional services and grants). Cost allocation principles further require that each cost incurred for the same purpose be treated consistently in similar circumstances. At the same time, certain awards have budgetary requirements which must be adhered to. Entities that do not have approved indirect cost rates must employ a method that balances multiple objectives. Condition: During our audit for the year ended June 30, 2024, we found that management did not prepare documentation to support allocation of wages, salaries, fringe benefits and other indirect costs. Questioned Costs: None Context: $50,553 of payroll and benefits was allocated to the grant in 2024. Cause and Effect: There is no mandated methodology the organization must follow when allocating indirect costs across its various grants. While the absence of a documented, repeatable methodology caused difficulties during the audit, we did not identify any financial statement misstatements related to this deficiency. Repeat Finding: Yes; 2023-001 Recommendation: The Alliance must document its allocation methodology and retain support for allocation calculations, including any exceptions to the established policy. Views of responsible officials and planned corrective actions: No disagreement with the audit finding. The Alliance documented the ARPA designated hours per employee and made adjustments where needed to allocate money away from ARPA funds when those were not reported. This process will be documented and all data and calculations supporting the allocations will be retained. Contact person responsible for corrective action: Lisa Wolf, Board Chair. Anticipated Completion Date: June 30, 2026