Finding Text
Compliance Requirement B. Allowable Costs Finding Type Noncompliance Over $25,000 Federal Agency U.S. Department of Health and Human Services U.S. Department of Energy Federal Program Title Administration for Children & Families - Head Start (93.600) Community Service Block Grant (93.569) Weatherization Assistance for Low Income Persons (81.042) Assistance Listing Numbers 93.600/93.569/81.042 Criteria: 2 CFR section 200.431 of the Uniform Guidance provides fringe benefits are allowances and services employers provide to their employees as compensation in addition to regular salaries and wages. Fringe benefits include, but are not limited to, the costs of leave, employee insurance, pensions, and unemployment benefits. Except as provided elsewhere, the costs of fringe benefits are allowable provided that the benefits are reasonable and are required by law, an organization-employee agreement, or an established written leave policy of the recipient or subrecipient. Condition: The Organization paid fringe benefits to the CEO without having a written policy covering such benefits. Cause: Lack of awareness of fringe benefits allowed under Uniform Guidance. Effect: Failure to have a written leave policy causes the Organization to be out of compliance with Uniform Guidance and results in the payment of unallowable costs by the Organization. Questioned Costs: $ 32,154 Identification as a Repeat Finding: N/A - this was not reported as a finding in the prior audit report. Context: During the year ended June 30, 2025, the CEO of the Organization was on leave for a significant amount of time. During this time, the Organization continued to pay the CEO their normal salary and charged a portion of the payments to federal funded programs. The employee filed for and received short-term disability and endorsed all insurance checks over to the Organization. Recommendations: We recommend that procedures be implemented to ensure that all expenditures are in compliance with 2 CFR 200 Office of Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Uniform Guidance before are expended. View of Responsible Officials: The Organization agrees with this finding.