Finding Text
Significant deficiency in internal controls over compliance related to allowable costs. Federal Agency: U.S. Department of Treasury Program Titles: Coronavirus State and Local Fiscal Recovery Fund Assistance Listing Number: 21.027 Award Numbers: EL-23-AR-47-048, EL-23-AR-49-353, and SLFRP0194. Project Period: November 1, 2021 - June 30, 2025 Criteria Under 2 CFR § 200.303, a non-federal entity is required to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition/Context for Evaluation During the audit for year ended June 30, 2025, it was noted that the allocations related to fringe benefits and other payroll expenses were not reviewed for accuracy, resulting in eight out of 60 payroll costs sampled not being adequately supported by approved allocations. This is not considered a statistical sample. Cause During the year ended June 30, 2025, the Agency was developing the allocation process that was not fully formalized at the beginning of the year. However, due to employee turnover in the finance department, this finalization of controls did not occur timely, leading to a lapse in control activities. Effect or Potential Effect The Agency did not apply their stated controls over allowable costs during the period. Questioned Costs $730.96 Repeat Finding Not applicable Recommendation We recommend that the Agency strengthen review of monthly allocations to ensure calculations are performed accurately. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying management corrective action.