Finding Text
Finding 2022-003: Reportable Finding Considered a Significant Deficiency ? Disbursement cutoff Program Name: Market Access Plan Assistance listing #: 10.601 Federal Awarding Agency: U.S. Department of Agriculture Award Number: 12-4336-0-3-999 Compliance Requirement: Allowable Costs/Principles Criteria: According to 2 CFR 200.403, costs must meet a set of criteria in order to be allowable under the federal award, including being determined in accordance with generally accepted accounting principles (GAAP). According to GAAP, expenses must be recognized in the period incurred. Condition: During our testing of allowable cost principles compliance, out of 40 selections, we noted one that was partially expensed in the incorrect year. Cause: The invoice for this selection included services performed in both fiscal year 2022 and 2023, but the entire invoice balance was expensed in 2022. Effect: The auditee was not in compliance with allowable cost principles outlined in of 2 CFR 200.403 resulting in program expenses being recognized in the incorrect year. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization adopt procedures for more detailed review of invoices prior to recognizing expenses. Invoices should be reviewed in detail to determine when the services were performed to therefore recognize the expense appropriately, rather than recognizing invoices upon receipt or upon payment. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.