Finding Text
Known Questioned Costs, Program Not Audited as a Major Program Noncompliance; Known Questioned Costs Reported Pursuant to 2 CFR 200.516(a)(4) - Federal Program: Assistance Listing No. 10.681 - Wood Education and Resource Center (WERC) Federal Agency: U.S. Department of Agriculture, Forest Service (direct award; no pass-through entity) Federal Award Identification: 23-DG-11094200-451 (federal award year 2023), as modified July 15, 2024; USDA Forest Service Wood Education and Resource Center grant agreement Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Noncompliance; known questioned costs for a federal program not audited as a major program Known Questioned Costs: $62,404 Criteria: 2 CFR 200.403 requires that costs charged to a federal award be adequately documented and otherwise allowable under the cost principles in 2 CFR 200 Subpart E, and 2 CFR 200.430 requires that charges for salaries and wages be supported by records that accurately reflect the work performed. 2 CFR 200.516(a)(4) requires the auditor to report known questioned costs greater than $25,000 for a federal program that is not audited as a major program. Condition: The Organization submitted requests to the Wood Education and Resource Center award totaling $163,960 for administrative costs for the year ended December 31, 2025. The Organization’s accounting records and supporting documentation substantiate administrative costs of $101,556 applicable to the award. The remaining $62,404 was claimed, and reimbursed by the grantor, without supporting documentation. The condition arises from the same practices described in Findings 2025-003 and 2025-004. Cause: See Findings 2025-003 and 2025-004. Effect or Potential Effect: Costs of $62,404 were claimed and reimbursed without documentation supporting their allowability. The amount was recorded as due to the grantor through an audit adjustment. This program was not audited as a major program, and we express no opinion on compliance with respect to it; the questioned costs are reported because they became known during the audit of the financial statements. Context: The condition was identified through examination of all administrative cost reimbursement requests submitted under the award for the year ($163,960) and comparison of those requests to the Organization’s accounting records in their entirety; no sampling was used. Total expenditures of the program for the year ended December 31, 2025 were $101,556. The program was classified as a Type B program and was not selected for audit as a major program. Recommendation: We recommend that the corrective action described in Findings 2025-003 and 2025- 004 be applied to all federal awards, and that the Organization coordinate with the awarding agency regarding repayment or offset of the amount recorded as due to the grantor. Repeat Finding: No Views of Responsible Officials: Management agrees that more specific and thorough review of reimbursement requests and the time allocated to individual projects should be implemented. The Organization will apply these strengthened review procedures to all federal awards and coordinate with the USDA Forest Service regarding the questioned costs.