Finding Text
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Special Programs for the Aging, Title III, Part C, Nutrition Services; Nutrition Services Incentive Program Assistance Listing Number: 93.045; 93.053 Federal Award Identification Number and Year: DA24-00030 (2024) Pass-Through Agency: City of Seattle Human Services Department Pass-Through Number(s): DA24-00030-A2 Award Period: January 1, 2024 through December 31, 2027 Type of Finding: Significant Deficiency in Internal Control over Compliance – Program Income Other Matters – Non-Compliance with Program Income Compliance Requirements Criteria or specific requirement: Per the OMB UG 2025 Compliance Supplement "program income is gross income earned by a non-federal entity that is directly generated by a supported activity or earned as a result of the federal award during the period of performance." Per 2 CFR 200.303(a), recipients of federal funding must establish, document, and maintain effective internal control over federal awards that provides reasonable assurance that federal awards are managed in compliance with applicable statutes, regulations, and the terms and conditions of the award. Program income should be accurately recorded and reported based on the underlying supporting documentation. Condition: During testing of program income, we identified one instance in which program income was not recorded in accordance with the underlying supporting documentation. Program income earned of $4.00 was recorded as $0.04 in the accounting records. Questioned costs: Questioned costs do not exceed the reportable threshold. Context: A sample of program income for the Lake Community Center Transit 35 Community Dining Project was recorded as $0.04. Testing of supporting documentation determined that actual program income earned totaled $4.00; however, due to a data-entry error, the amount was incorrectly recorded as $0.04. Although management performed review procedures over program income, the error was not identified prior to recording. Cause: The exception resulted from a manual data-entry error that was not identified through the review process prior to recording. Effect: Program income was not recorded in accordance with the underlying supporting documentation. The exception resulted in an understatement of program income of $3.96. While the amount of the exception was not material to the federal program and did not result in material noncompliance, the error was not identified through management's review procedures. Repeat Finding: No. Recommendation: Management should review its existing control structure and ensure that there are adequate processes and controls to ensure program income is recorded accurately for federal programs based on the underlying supporting documentation. Management should also continue to reinforce review procedures over program income reporting to help ensure recording errors are detected and corrected on a timely basis. Views of responsible officials and planned corrective actions: Please see the attached Management’s Corrective Action Plan.