Finding Text
Finding Type: Significant Deficiency in Internal Control Over Compliance Title and ALN of Federal Program: 93.558 – Temporary Assistance for Needy Families Criteria or Specific Requirement: B. Allowable Costs and Cost Principles - 2 CFR section 200.303 of the Uniform Guidance requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In addition, 2 CFR section 200.403 provides that costs charged to a Federal award must be necessary, reasonable, allocable, adequately documented, and in conformance with applicable Federal requirements and the terms and conditions of the Federal award. Condition: During the audit, it was noted that the Association was unable to provide formal support for the internal review and approval of costs relating to stipends paid that were submitted to the pass-through grantor under the major program. Cause: The Association lacks established procedures which provide formal evidence that the allowability, accuracy and completeness of stipend transactions were verified before submission. Effect or Potential Effect: Although no stipend payments were identified which exceeded the allowable amount under the subaward agreement, without adequate controls in place to ensure all charges to the federal program are properly reviewed and approved for allowability, the Association faces increased risk of noncompliance with the allowability requirement and could request funds for unallowed costs. Questioned Costs: None. Identification as a Repeat Finding: N/A — this was not reported as a finding in the prior year audit report. Context: For the stipend payments selected for testing, there was no formal support for the internal review and approval of costs submitted to the pass-through grantor under the major program. Recommendation: We recommend the Association implement a formal process for review and approval of stipend payments. This should include maintenance of a standardized stipend calculation form or comparable documentation for each payment. The documentation should identify the participant, applicable payment period, attendance and participation records and/or milestones achieved, calculation of the stipend amount, and evidence of review and approval before payment. Views of Responsible Officials: Management agrees with the finding and recommendation.