Finding Text
Assistance Listing Number, Federal Agency, and Program Name - 98.001, U.S. Agency for International Development, USAID Foreign Assistance for Programs Overseas Federal Award Identification Number and Year - AID-612-A-16-00003, 2016; 72061222CA00003, 2022 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - In accordance with 2 CFR 200.502(a), the determination of when a federal award is expended must be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the nonfederal entity to comply with federal statues, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. Condition - The schedule of expenditures of federal awards (SEFA) for the year ended June 30, 2022 includes expenditures incurred during the prior fiscal year. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - Out of a sample of 40 expenditures selected for allowability testing, 4 samples related to expenditures incurred in the prior fiscal year but not accrued by the Organization until the current fiscal year-end. The identified expenditures that pertain to prior fiscal year amount to $40,944 and are incorrectly included in the schedule of expenditures of federal awards as of June 30, 2022. Cause and Effect - Internal controls did not ensure proper cut-off of federal expenditures therefore overstating the SEFA for the current fiscal year. The improper inclusion of prior year expenditures in the current fiscal year SEFA did not affect the major program determination. Furthermore these costs were incurred within the period of performance creating no questioned costs. Recommendation We recommend the Organization establish controls and processes to ensure expenditures are reported in the appropriate fiscal year within the general ledger and the SEFA. Views of Responsible Officials and Corrective Action Plan The Organization acknowledges this finding. Going forward the Organization will implement a review process of the Schedule of Expenditures of Federal Awards.