Finding Text
Finding No.: 2024-026 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases Federal Award No.: NU50CK000558 Area: Period of Performance Questioned Costs: $25,916 Criteria: Grant agreements stipulate the period of performance during which time only costs resulting from obligations of the funding period may be charged. Furthermore, 2 CFR 200.303(a) states that a recipient of a Federal award must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: For 6 (or 24%) of 25 transactions tested aggregating $359,848 of $544,405 in non-payroll expenditures, costs were incurred outside of the period of performance: Item # Voucher # Cost Incurred Date Period Ending Date Expenditure Amount Questioned Cost 1 23/00018308PV 8/1/2024 to 8/30/2024 7/31/2024 $ 5,076 $ 5,076 2 23/00007770INVOICE 9/24/2024 to 9/26/2024 7/31/2024 3,000 3,000 3 23/00006090PINVOICE 8/7/2024 7/31/2024 788 788 4 23/00007033INVOICE 9/12/2024 7/31/2024 150 150 5 23/00007702INVOICE 10/7/2024 7/31/2024 201 201 6 23/00005895JOURNAL/23/00017983PV 02/21/2024 to 8/20/2024 7/31/2024 151,979 16,701 $ 161,194 $ 25,916 Item # 6 questioned cost is prorated for the 20 days outside of the period of performance. Cause: RepMar did not establish and enforce adequate internal control policies and procedures to ensure that expenditures charged to Federal awards comply with applicable period of performance requirements. Effect or Potential Effect: RepMar is in noncompliance with applicable period of performance requirements. The reportable questioned cost is $25,916. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: In accordance with 2 CFR 200.303(a), RepMar should implement adequate internal controls policies and procedures over period of performance requirements. Such controls should clearly define procedures for identifying grant award start and end dates, periodic supervisory reviews of expenditures for allowability and timing, and ongoing monitoring activities to verify compliance. Views of Responsible Officials: The Ministry disagrees with the findings. The Bisan system includes functionality to control expenditures within a specified funding period, typically the Budget Period or Period of Performance. These are the Start Date, End Date (last day for obligations) and Closing Date (last day to liquidate encumbrances) in each SPG code setup. The Ministry utilizes this feature to help ensure compliance with funding requirements. Auditor’s Response: We acknowledge management’s disagreement; however, the expenditures identified were outside of the period of performance based on the substantive audit procedures performed. Accordingly, based on the evidence available at the time of audit conclusion, the finding remains unchanged.