Finding Text
Significant deficiency in internal controls over compliance and instances of noncompliance related to period of performance. Federal Agency: United States Department of Health and Human Services Program Title: Refugee and Entrant Assistance State/Replacement Designee Administered Programs Pass-Through Entities: Michigan Department of Labor and Economic Opportunity Assistance Listing Number: 93.566 Award Identification: All awards Criteria Per the standards contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance), Subpart D ‐ Post Federal Award Requirements, Section 200.309, only allowable costs incurred during the period of performance may be charged to the federal awards and the start date of a renewal award begins a new and distinct period of performance. Condition/Context During our audit, out of a sample of 25 transactions tested for period of performance, we identified three selections where the cost was incurred before the respective renewal award’s period of performance start date. All three charges that were outside of the period of performance related to charges for goods and services that were entered into the incorrect period due to timing of receipt of the invoice and close out of the prior award. Cause The Organization’s controls did not operate effectively to prevent or detect expenditures that were incurred outside of the federal award’s period of performance. Effect or Potential Effect The Organization charged to federal awards costs incurred outside the period of performance. Questioned Costs Award UHPAS26-5002: $117 Award RSI26-0033: 15 Award RSS26-00002: 24 Total Questioned Costs: $156 Recommendation We recommend the Organization strengthen its internal control processes and procedures to ensure there are adequate controls in place to identify and record charges in the correct period to prevent charges to federal awards that did not occur within the award’s period of performance. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan. Repeat Finding Repeat of finding 2024-001.