Finding 32300 (2022-003)

-
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2023-03-30
Audit: 35785
Organization: Lakewood Theatre Company (OR)

AI Summary

  • Core Issue: Lakewood Theatre Company lacks written procedures for determining the allowability of costs, as required by 2 CFR Part 200.302(b)(7).
  • Impacted Requirements: Without these procedures, there is a risk of charging unallowable costs to the program.
  • Recommended Follow-Up: Management should create the necessary written procedures to ensure compliance with federal funding requirements.

Finding Text

Criteria: 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition: Lakewood Theatre Company has not developed written procedures for determining the allowability of costs. Cause: Administration did not have written procedures for determining the allowability of costs. Effect: Unallowable costs could be charged to the program. Questioned Costs: None Recommendations: Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials: Management notes that, as this is their first time receiving significant federal funding and this was one-time emergency funding rather than an ongoing award, they do not have these procedures in writing. However, they reviewed the award allowability guidelines, assigned costs directly in accordance with those guidelines, discussed any costs with uncertain allowability with the awarding agency, and submitted the cost report along with supporting documentation directly to the awarding agency. While they do not anticipate receiving federal funding in the future, if this does occur, they will develop written procedures at that point.

Corrective Action Plan

Response: Management notes that, as this is their first single audit and this was one-time emergency funding rather than an ongoing award, they do not have these procedures in writing. However, they followed SBA/SVOG guidelines for allowability of costs, which were researched early in the grant process, and assigned costs in accordance with those guidelines. The budget, which included all assigned costs and was approved by the Lakewood Board of Directors, was also submitted and cleared by the SVOG Compliance Team and they inquired about the allowability of any items over which the guidelines were unclear. Action to be taken: Management notes that, as this was one-time emergency funding rather than an ongoing award, they do not anticipate receiving federal funding in the future. As such, they do not intend to document these procedures in writing at this point. However, if they apply for federal funding again in the future, they will develop written procedures at that point. Responsible Person: Andrew Edwards, Executive Director

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
59.075 Covid-19 - Shuttered Venue Operators Grant Program $1.11M