Finding Text
2025-005: Noncompliance with Period of Performance Requirements - ALN 93.568 Condition: Management is responsible for ensuring that costs charged to federal awards are incurred within the applicable period of performance and properly recorded in the appropriate period. During our testing, we noted that, as part of the grant closeout process, management reclassified certain expenses from a Fee-for-Service program to the WXHHS grant to align costs with grant budget categories. The expenses reclassified related to prior year activity and were recorded during the year ended June 30, 2025, outside the applicable period of performance. Criteria: In accordance with 2 CFR §200.309, costs may be charged to a federal award only during the approved period of performance. Additionally, 2 CFR 200.403 requires that costs be allocable to the federal award and incurred during the period of performance to be allowable Cause: The condition appears to be attributable to the client’s closeout procedures, which permit post-period reclassification of costs to grants without sufficient controls to ensure that only costs incurred within the applicable period of performance are charged to the award. Questioned Costs: $2,536 Effect: As a result of this condition, costs were charged to the grant outside of the applicable period of performance, resulting in noncompliance with federal requirements. Recommendation: We recommend that management enhance controls over the grant closeout process to ensure that all costs charged to federal awards are incurred within the applicable period of performance. This should include a formal review of transaction dates and supporting documentation prior to recording any reclassifications to grant accounts, as well as procedures to prevent the inclusion of prior-period costs in current grant activity. Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.