Finding Text
Finding 2025-001 Agency: U.S. Department of Health and Human Services (CSBG) Program: Community Service Block Grant (AL No. 93.569) Significant Deficiency and Noncompliance over Allowable Costs / Period of Performance Repeat Finding: No Condition: During our testing over allowable costs, we identified 2 transactions in the amount of $38,225 that were incurred in fiscal years 2022 and 2023, however, those costs were recorded as federal expenditure and revenue in fiscal year 2025. The current CSBG grant covering fiscal year 2025 covers the period October 1, 2024 – September 30, 2025, as such, those costs were recorded outside of the period of performance and as such are unallowable. Criteria: As provided in 2 CFR section 200.309: The period of performance is the time during which the non-federal entity is authorized to incur allowable costs. The period of performance starts and ends on the dates specified in the federal award, and costs incurred outside of this period are generally unallowable, unless specifically authorized. Cause: The Organization did not follow its policies and procedures to ensure that all vendor invoices have been received timely and recorded in the accounting records. Effect: The Organization recorded expenditures that were outside of the period of performance and as such are unallowable. Questioned Costs: Unknown Recommendation: We recommend that management strengthen controls over the timing of federal expenditure recognition to ensure costs are recorded in the proper period of performance. Additionally, the entity should implement procedures to review and reconcile expected expenses to actual invoices received on a periodic basis to ensure all vendor invoices have been timely received. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the schedule of corrective action plans.