2025-002 (Significant Deficiency in Internal Control over Compliance): Allocation of Fringe Benefits Criteria: CFR 200.431 Compensation--fringe Benefits requires recipients to allocate fringe benefits to federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals whose salaries and wages are chargeable to the federal award and other activities. In addition, it directs recipients to allocate fringe benefits to federal awards and other activities by identifying specific benefits to specific employees or allocating them based on entity-wide salaries and wages of the employees receiving the benefits. When the allocation method is used, separate allocations must be made to selective groupings of employees unless the recipient demonstrates that costs in relationship to salaries and wages do not differ significantly for different groups of employees. Condition: The allocation methodology being used by the Organization to allocate fringe benefits to the federal award and other activities was not fully consistent with the method described in CFR 200.431. Questioned Costs: Potential questioned costs for this federal award for the year ending December 31, 2025 are below $25,000. Effect: The allocation methodology creates a risk that fringe benefits may be charged to the federal award that are not allocable to the award and result in a material amount of unallowable costs. Planned Corrective Actions: The Organization will review CFR 200.431, obtain additional training, and adjust its allocation methodology related to fringe benefits to ensure compliance.