Finding Text
Finding Number: 2022-004; Finding Type: Federal award finding; Federal Assistance Listing No.: 21.027;
Program Name: Coronavirus State and Local Fiscal Recovery Funds; Federal Agency: Department of Treasury; Pass-Through Entity: Multnomah County, Worksystems, Inc., Prosper Portland; Grant Number: 2289-17-01, 20-30701, 21-30600, 21-30702, 21-30710, 22-30600, 22-30710, DCHS-SVCSGEN-12988-2021; DCHS-SVCSGEN-12994-2021, DCHS-SVCSGEN-14074-2022, HD-SVCSGEN-13829-2022; Federal Award Year: 2022; Control Deficiency Type: Significant deficiency over compliance; Instances of Noncompliance: Yes; Compliance requirement: Allowable Costs; Questions Costs: None; Repeat Finding: No Criteria: Title 2, U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Costs Principles, and Audit Requirements for Federal Awards, Appendix IV – Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit Organizations, requires that organizations that have previously established indirect cost rates must submit a new indirect cost proposal to the cognizant agency for indirect costs within six months after the close of each fiscal year, unless approval is obtained from their cognizant agency to waive the requirement. Condition: During the audit, we requested a copy of the organization’s indirect cost rate proposal for audit purposes. The organization was unable to provide a copy to us, informing us that preparation and submission of the proposal was only required every two years, not annually. When we recommended that they confirm this with their cognizant agency, the organization was informed that submission of the proposal is indeed an annual requirement, and that they had missed the deadlines for both the fiscal 2021 and 2022 filings. Subsequently, the organization has received approval for an extension to May 31, 2023 for both years. Cause: Lack of internal controls to ensure that the indirect cost rate proposal is being submitted as required. Effect: The organization did not follow rules established under Uniform Guidance. Questioned costs: None. Audit Recommendation: We recommend that the organization implement internal control procedures to ensure that indirect cost rate proposal to be submitted in a timely manner. Management’s Response: Management has requested and was approved for an extension and will submit the indirect cost rate proposal before May 31, 2023. Thereafter, management will ensure that the indirect cost rate proposal is submitted annually