Finding Text
Federal Agency: U.S. Department of Energy Federal Program: Conservation Research and Development Assistance Listing Number: 81.086 Federal Award Identification Number(s) and Federal Award Year(s): DE-EE0010632 (2024) Pass-Through Entity: Electric Power Research Institute, Inc. Pass-Through Identification Number: 10017391 Compliance Requirement: B—Allowable Costs/Cost Principles Criteria or Specific Requirements: Under 2 CFR §200.430, salary and wage charges to Federal awards must be supported by records that accurately reflect the work performed. Budget estimates alone do not qualify as support for charges to Federal awards. When budget estimates are used for interim accounting purposes, the Organization must perform periodic after-the-fact reviews and make necessary adjustments so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: During reconciliation of Federal award revenue to expenditures reported on the SEFA, we identified that the Organization used budgeted compensation rates exceeding actual allowable compensation costs to prepare reimbursement requests under this award. The Organization did not reconcile and adjust the amounts billed to actual allowable costs, resulting in excess reimbursement of $20,997. Cause: The Organization did not have an effective review process to ensure that compensation charges included in reimbursement requests were reconciled to actual allowable compensation costs and that differences were appropriately resolved. Effect: The Organization received $20,997 in reimbursement exceeding actual allowable compensation costs, resulting in noncompliance with the applicable cost principles. An audit adjustment was recorded to reduce government grant revenue and recognize a refundable advance for this amount. Perspective Information: The matter involved the Charging Infrastructure Interconnection Simplification Resource project under one nonmajor Federal program. Federal expenditures reported on the SEFA for this award totaled $97,738 for 2025. The excess reimbursement of $20,997 was identified during SEFA reconciliation procedures rather than major-program compliance testing. Questioned Costs: $20,997, representing compensation reimbursements exceeding actual allowable costs. Repeat Finding: None. Recommendations: We recommend that management establish and document procedures to reconcile compensation charges included in reimbursement requests to actual allowable compensation costs. When budget estimates are used for interim billing, management should perform periodic after-the-fact reviews and promptly adjust subsequent billings or arrange repayment, as appropriate. An individual other than the preparer should review and approve the reconciliations and related adjustments, with documentation retained to support the review. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See attached corrective action plan.