Finding 21874 (2022-002)

Significant Deficiency
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2023-07-24

AI Summary

  • Core Issue: The Council failed to maintain adequate documentation for three transactions, leading to potential non-compliance with federal requirements.
  • Impacted Requirements: Internal controls and documentation standards outlined in 2 CFR 200.303 and 200.403(g) were not met.
  • Recommended Follow-Up: Implement stronger controls for reviewing and approving expenditures, ensuring all necessary documentation is retained.

Finding Text

2022-002 ALLOWABILITY Federal Program Information: Federal Agency and Program Name: National Endowment for the Humanities: Promotion of the Humanities-Federal/State Partnership Grant Number: SO-268683-20 Federal Assistance Listing Number: 45.129 Criteria: 2 CFR 200.303 requires that a non-federal entity must ?(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? 2 CFR 200.403(g) states costs must ?be adequately documented.? Condition: For three of the 40 transactions selected for testing, documentation could not be located to support approval or allowability of the expenditure. Questioned Costs: $5,876 Context: Total federal expenditures for the Promotion of the Humanities-Federal/State Partnership program were $830,848 for the year ended October 31, 2022. Cause: The Council did not retain adequate documentation of all expenditures charged to the federal program. Effect: The Council is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Expenditures were paid that may not be allowable. Recommendation: We recommend that the Council implement controls to ensure that expenditures are properly reviewed and approved before being charged to a federal award and that adequate supporting documentation is maintained. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.

Corrective Action Plan

FEDERAL AWARD FINDINGS 2022-002 - ALLOWABILITY Recommendation: We recommend that the Council implement controls to ensure that expenditures are properly reviewed and approved before being charged to a federal award and that adequate supporting documentation is maintained. Action Taken: In February 2023, the current Fiscal Officer received formal training from the National Endowment for the Humanities' grants management staff on allowable costs and proper documentation procedures for federal grants and grant-making entities, under 2 CFR 200. The Fiscal Officer and all staff involved with federal grants subsequently reviewed the Council's internal procedures, to ensure that all expenditure paperwork is received, approved, and filed with the grant documentation.

Categories

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 598316 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
45.129 Promotion of the Humanities_federal/state Partnership $830,848
45.025 Promotion of the Arts_partnership Agreements $38,500
45.024 Promotion of the Arts_grants to Organizations and Individuals $26,993