Finding 1217654 (2023-008)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2026-06-16

AI Summary

  • Core Issue: Shared costs were allocated across multiple grants without a formal policy or documented methodology.
  • Impacted Requirements: Lack of documentation means we can't verify that costs were fairly distributed based on actual benefits to each grant.
  • Recommended Follow-Up: Establish a clear allocation policy and ensure proper documentation for future cost distributions.

Finding Text

During testing of SLFRF expenditures, we noted that certain shared costs (e.g., grocery purchases) were allocated across multiple grants. The allocation methodology was determined by the Executive Director based on which grants required more rapid spend-down. There was no documented allocation policy, formula, or contemporaneous support demonstrating that costs were distributed based on proportional benefit to each funding source.

Corrective Action Plan

LARS will develop and adopt a written cost allocation policy that governs the distribution of shared costs across funding sources. The policy will include the following: • An enumeration of permissible allocation bases, which may include client counts by program, usage logs, program participation data, square footage, or other equitable measures that reflect the relative benefit received by each program • A prohibition on allocating costs based on funding availability, grant end dates, or spend-down considerations • A requirement that all shared cost allocations be supported by contemporaneous documentation identifying the allocation base used, the calculation applied, and the period covered • A requirement for supervisory review and approval of all shared cost allocations prior to recording in the accounting system • Consistent application of the chosen allocation methodology across all periods and funding sources

Categories

Procurement, Suspension & Debarment Allowable Costs / Cost Principles Cash Management

Other Findings in this Audit

  • 1217652 2023-006
    Material Weakness Repeat
  • 1217653 2023-007
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.267 CONTINUUM OF CARE PROGRAM $574,563
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $416,705
21.023 EMERGENCY RENTAL ASSISTANCE PROGRAM $186,172
97.024 EMERGENCY FOOD AND SHELTER NATIONAL BOARD PROGRAM $181,311
14.218 COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS $89,614