Finding 28752 (2022-002)

Federal Agency: U.S. Department of Commerce Compliance Requirement: Period of Performance Federal Program: 11.805 - MBDA Business Center-Coronavirus Recovery/Relief Grant Award: MB21OBD8050183 Condition/Context: During FY2022, CRMSDC purchased a software subscription used to help MBEs locate state and local contract opportunities. The subscription period was from June 28, 2022 through June 27, 2023; however, the federal award ended on June 30, 2022. Thus, the benefits of the subscription service purchased under the award were received outside the grant?s period of performance. Criteria: 2 CFR Part 200 of the Uniform Guidance requires that a non-Federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance. Cause: The organization did not obtain written approval from the federal funding source to purchase a yearly subscription at the end of the period of performance for the federal award. Effect: Since the charge was incurred outside of the grant?s period of performance, the federal award did not receive the benefit of the subscription service. Questioned Costs: The total software subscription cost selected for testing and charged to the federal award program was $25,000. Recommendation: We recommend that management enhance procedures to ensure that costs recorded during the latter part of a grant are incurred within the period of performance unless written approval is obtained from the funding source. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section.