Finding 20778 (2022-002)

Significant Deficiency
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2023-07-23
Audit: 26764
Organization: Transit Alliance Group, Inc. (GA)
Auditor: Mstiller LLC

AI Summary

  • Core Issue: Missing documentation for 1 out of 37 disbursements raises concerns about compliance with federal cost principles.
  • Impacted Requirements: Internal controls and monitoring for allowable costs under Uniform Guidance were inadequate.
  • Recommended Follow-Up: Strengthen recordkeeping policies and hire experienced staff to ensure compliance and improve documentation practices.

Finding Text

2022-002 Allowable Costs Principles for Disbursements ? Significant Deficiency Criteria: The Uniform Guidance sets forth certain Cost Principles outlined at 2 CFR Part 200, Subpart E for federal award recipients to implement the necessary internal controls and effective monitoring to ensure compliance. These principles require that the recipient provide for adequate documentation to support costs charged to the Federal award. Condition: Supporting documentation was missing for 1 out of 37 disbursements selected for allowable costs testing during the audit. Without adequate transportation logs, we were unable to determine if the reimbursed trips occurred. However, the projection of the error was less than the $25,000 reportable limit of questioned costs. Cause: The Organization?s controls did not provide for supporting documentation to be adequately retained. Recommendation: We recommend that internal control procedures on recordkeeping and filing should be clearly stated as part of the Organization policy. Views of responsible officials: Organization management concurs with the finding. The Organization will implement additional internal controls for processing subcontractor documentation and addressing discrepancies to remain in compliance with Federal and State guidelines. The Organization will also begin a search to hire an experienced staff person to implement these internal controls.

Corrective Action Plan

2022-002 Condition: Supporting documentation was missing for 1 out of 37 disbursements selected for allowable costs testing during the audit. Without adequate transportation logs, we were unable to determine if the reimbursed trips occurred. However, the projection of the error was less than the $25,000 reportable limit of questioned costs. Cause: The Organization?s controls did not provide for supporting documentation to be adequately retained. Recommendation: We recommend that internal control procedures on recordkeeping and filing should be clearly stated as part of the Organization policy. Management Response: We concur with the finding. The Organization?s internal control procedures have been inconsistent due to changes in the processing of DHS invoices, necessitating adjustments to the Organization?s records and filings after the fact because of errors and omissions relative to the use of the DHS software mandated (by DHS). This has resulted in numerous discrepancies between DHS and the Organization?s subcontractor documentation. On occasion, the discrepancy between the DHS software and the Organization?s internal control documents could not be reconciled. These reconciliations occurred after the DHS invoice was closed; consequently, the discrepancies could not be corrected. Corrective Action: The Organization will immediately implement an Organizational Policy that will require the reconciliation of the Organization?s internal documents based on subcontractor documentation and invoices prior to the closure of the DHS invoice to ensure both reconcile exactly. All discrepancies will be documented, and attempts will be made to resolve them completely. To ensure compliance with this Corrective Action, the Organization will immediately begin a search for an experienced consultant/consulting firm/qualified part-time staff person to manage the day-to-day bookkeeping requirements for the Organization to ensure that adjustments are made in a timely way and account balances are reviewed for completeness and accuracy. The day-to-day financial control processes will be implemented and followed by the consultant/consulting firm/part-time staff. The Organization will advertise for qualified consulting agencies/consultants/part-time staff and will select the best-qualified respondents to assist the Organization. Name of Responsible Person: Barbara Hurst

Categories

Allowable Costs / Cost Principles Subrecipient Monitoring Significant Deficiency

Other Findings in this Audit

  • 597220 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.667 Social Services Block Grant $1.34M
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $167,757
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities $103,762
84.126 Rehabilitation Services_vocational Rehabilitation Grants to States $308
93.563 Child Support Enforcement $80