Finding Text
Finding No.: 2024-007 - Period of Performance Identification of the federal program: Federal Agency: U.S. Department of the Interior AL No. and Title: 15.875 Economic, Social and Political Development of the Territories Federal Award No.: Compact of Free Association Program, As Amended Criteria or specific requirement (including statutory, regulatory or other citation): The terms of the sub-awards administered by RepMar under the Compact of Free Association grant awards stipulate the period of performance during where costs resulting from obligations of the funding period may be charged. 2 CFR 200.344(c) states: The recipient must liquidate all financial obligations incurred under the Federal award no later than 120 calendar days after the conclusion of the period of performance. When justified, the Federal agency or pass-through entity may approve extensions for the recipient or subrecipient. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Salaries charged to the program were incurred prior to the funding period stipulated in the grant awards. Cause: The College lacks adequate internal controls over compliance with applicable federal regulations relating to period of performance. Effect or potential effect: The College is in noncompliance with applicable period of performance requirements. Questioned costs: $8,351 Context: We identified 333 transactions recorded during the beginning of the period of performance totaling $349,375. We tested 40 transactions totaling $55,185. The samples were statistically valid. Of 40 transactions tested, 19 (or 48%) transactions were incurred prior to the period of performance. Details of samples with noncompliance are as follows: Identification as a repeat finding, if applicable: 2023-007 Recommendation: College management should improve internal control policies and strengthen controls to comply with applicable period of performance requirements. Specifically, review should be performed to ensure all costs charged to the program are incurred within the funding period stipulated in the grant awards. Views of responsible officials: The College agrees with the finding and provides details in its Corrective Action Plan.