Finding Text
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.267 Program: Continuum of Care Program Award/Pass-Through Entity Identifying Numbers: DA-202407-02980, DA-202407-02967, 00002098 Criteria: The Uniform Guidance in 2 CFR §200.403 states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. “Except where otherwise authorized by statute, costs must meet the following criteria to be allowable under Federal awards: a)Be necessary and reasonable for the performance of the federal award and be allocablethereto under these principles. b)Conform to any limitations or exclusions set forth in these principles or in the Federal awardas to types or amount of cost items. c)Be consistent with policies and procedures that apply uniformly to both federally financedand other activities of the recipient or subrecipient. d)Be accorded consistent treatment. For example, a cost must not be assigned to a Federalaward as a direct cost if any other cost incurred for the same purpose in like circumstanceshas been allocated to the Federal award as an indirect cost. e)Be determined in accordance with generally accepted accounting principles (GAAP), except,for State and local governments and Indian Tribes only, as otherwise provided for in thispart. f)Not be included as a cost or used to meet cost sharing requirements of any other federallyfinanced program in either the current or a prior period. See § 200.306(b). g)Be adequately documented. See §200.300 through §200.309. h)Administrative closeout costs may be incurred until the due date of the final report(s). Ifincurred, these costs must be liquidated prior to the due date of the final report(s) andcharged to the final budget period of the award unless otherwise specified by the Federalagency. All other costs must be incurred during the approved budget period. At itsdiscretion, the Federal agency is authorized to waive prior written approvals to carryforward unobligated balances to subsequent budget periods. See §200.308(g)(3).” Condition: During our testing of direct costs (excluding salaries and related benefits), we noted in accordance with §200.403(g) that 2 of 43 transactions lacked underlying documentation to support the underlying expense for some, or all, of the expense. Cause: LifeWire did not have sufficient controls within the program services department to adequately document the nature of, and provide reconciling information, for the expenses prior to submission to the accounting department for payment. Effect or Potential Effect: Without adequate controls in place to ensure documentation is adequately maintained for costs, LifeWire could incorrectly charge expenditures to the federal programs. Questioned Costs: Below reporting threshold. Context: This is a condition identified per review of LifeWire’s compliance with specified requirements not using a statistically valid sample. Nonpayroll costs in 2025 were $1,053,085. The samples tested consisted of 43 transactions totaling $53,885. Questioned costs consist of amounts in excess of maintained documentation and totaled $1,931. For one transaction, only payment confirmation was retained, which did not include documentation of the nature of the expense. For the second transaction, LifeWire charged an amount in excess of the monthly lease payment and did not retain documentation to support the additional amount or nature of those costs. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that policies and procedures be updated to ensure underlying support is appropriately maintained as required by §200.403 for all transactions. Views of Responsible Officials: Management agrees with the finding that documentation was not sufficiently maintained to support underlying expenditures. LifeWire has updated its policies and procedures to explicitly require that underlying documentation supporting the nature and amount of each expenditure be retained.