Finding 31375 (2022-002)

Significant Deficiency
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2023-06-12

AI Summary

  • Core Issue: UCAP lacks written procedures for determining the allowability of costs, violating 2 CFR section 200.302.
  • Impacted Requirements: This affects compliance with federal cost principles and can lead to unallowable costs being charged to grants.
  • Recommended Follow-Up: Ensure that written procedures are consistently followed and conduct a thorough review of expenditures to prevent errors.

Finding Text

Criteria: 2 CFR section 200.302 stipulates that the financial management system of the nonfederal entity must provide for written procedures for determining the allowability of costs in accordance with subpart E (cost principles) and the terms and conditions of the Federal award. Condition: UCAP has no written procedures for determining the allowability of costs in accordance with subpart E (cost principles) and the terms and conditions of the Federal award. Context: This is a condition identified based on review of Uniform Guidance requirements. Questioned Cost: $ 0 The known and likely questioned costs are less than the reportable threshold. Cause: No written procedures were established, therefore the procedures for determining the allowability of costs were not performed consistently. Effect: We noted instances where unallowable costs were charged to the federal grant. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: We suggest that the procedures for determining the allowability of costs in accordance with cost principles be written so that the compliance requirement as explained in 2 CFR Section 200 Subpart D section 200.302 can be satisfied, and we suggest that such procedures to be followed consistently. Views of Responsible Officials and Planned Corrective Action Plan: UCAP agrees with the finding. Planned Corrective Action: UCAP has set up written procedures and descriptions of costs which was submitted to all executive and program staff to be used prior to submission of program expenditures. This was provided to program managers in order to ensure that the cost allocations are followed according to procedures. We have also implemented an internal policy in our financial reporting department to ensure that unallowable costs are not charged to expenditures in error through a thorough two-party review of all expenditures charged to grants. With the several layers of review, it will ensure that no unallowable costs are charged to federal grants. Responsible Official: Maryland Hutchinson, Fiscal Manager. Anticipated Completion Date: This was completed as of 3/31/2023.

Corrective Action Plan

Audit Finding #2022-002 Allowability of Costs Name of Contact Person: Maryland Hutchinson, Fiscal Manager. Corrective Action: UCAP has set up written procedures and descriptions of costs which was submitted to all executive and program staff to be used prior to submission of program expenditures. This was provided to program managers in order to ensure that the cost allocations are followed according to procedures. We have also implemented an internal policy in our financial reporting department to ensure that unallowable costs are not charged to expenditures in error through a thorough two-party review of all expenditures charged to grants. With the several layers of review, it will ensure that no unallowable costs are charged to federal grants. Proposed Completion Date: This was completed as of 3/31/2023.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 31376 2022-003
    Significant Deficiency
  • 607817 2022-002
    Significant Deficiency
  • 607818 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.569 Community Services Block Grant $1.33M
14.267 Continuum of Care Program $635,114
14.218 Community Development Block Grants/entitlement Grants $133,753
97.024 Covid-19 Emergency Food and Shelter National Board Program $26,956
14.169 Housing Counseling Assistance Program $21,538
21.019 Coronavirus Relief Fund $11,538