Finding Text
Internal Controls over Compliance and Compliance with the Period of Performance Compliance Requirement Identification of the Major Federal Program: United States Agency for International Development (USAID) Assistance Listing Number: 98.NoAL Assistance Listing Name: USAID – Cost-Reimbursable Contracts and Other Awards Grant Award Number under the Uniform Guidance Requirements: See Schedule of Findings and Questioned Costs for table. Criteria or Specific Requirement: In accordance with §200.309 Modification to Period of Performance, a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Additionally, §200.344(c) Closeout, states that unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award as required by §200.344(b). When used in connection with a non-Federal entity’s utilization of funds under a Federal award, “financial obligations”, as defined in §200.1 Definitions, means orders placed for property, services, contracts, and subawards made, and similar transactions during a given period that require payment by the non-Federal entity during the same or a future period. Condition: During the period of performance completeness testing, we identified $31,281 of costs related to EGPAF and $1,285 related to PSI that were recorded after the period of performance. Questioned Costs: $32,566 of known questioned costs. Context: Our testing of the period of performance compliance requirement was performed by examining whether the expenses selected as part of our testing of allowable costs and allowable activities were incurred within the proper period of performance of the award. Our subsequent testing of additional detailed expenditures identified no further samples that were recorded incorrectly. Cause: HealthXP management has procedures in place to review expenditures to determine the appropriate period of performance; however, those procedures were not performed to a level of detail to identify expenses that were incurred outside the period of the award. Effect: The lack of adherence to the established internal control procedures around the period of performance of the award resulted in noncompliance and questioned costs billed and received that need to be returned to the USAID. Continued noncompliance with federal statutes, regulations, and the provisions of the award agreements could ultimately result in additional disallowed costs for the major program. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management revisit and consider revising their internal procedures around detecting expenditures incurred outside of the period of performance in order to prevent the charging of costs outside of the period of performance of the award. Furthermore, we believe an option would be to close the project within the accounting system, and create a separate project to accumulate any costs incurred after the end of the period of performance. The costs incurred subsequent to the end of the period of performance should be reviewed and approved by individuals at HealthXP’s headquarters. Views of Responsible Officials: HealthXP management agrees with the finding and recommendations set forth within and will provide training to appropriate staff responsible for monitoring expenses on the program. Refer to management’s corrective action plan for additional information.