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FINDING # - 2022-001 Internal Control ? SIGNIFICANT DEFICIENCY Compliance Requirement- Allowable Costs/Cost Principles 59.075 ? SBA ? Shuttered Venue Operators Grant (SVOG) FEDERAL AGENCY: Small Business Administration (SBA) 1. CRITERIA In accordance with the Compliance Supplement, as part of the Shuttered Venue Operators Grant (SVOG) application process, the Garden submitted a Budget of Expenditures to the SBA through the SVOG Portal, which outlined the Garden?s planned use of SVOG funds. The Garden is required to reconcile the Budget of Expenditures to the Actual Expenditures allocated to the SVOG and provide it to the SBA. The Garden entered into this grant with the SVOG on July 7, 2021. The grant allows for reimbursement of costs from March 1, 2020 through December 31, 2021. 2. CONDITION/PERSPECTIVE The reconciliation of Expenditures, including the detail behind the actual amounts, had not been provided to the SBA at the time of our testing. The reconciliation and detail are to be provided to the SBA upon being selected for monitoring. During our testing, we noted the following: - 3 of our 60 Expenditure selections were determined to be incorrectly included in the SVOG Expenditure detail and had to be removed/replaced. - The Garden reevaluated the SVOG Expenditure details and identified additional Expenditures that did not meet the grant criteria for allowability. - Collectively, these errors are indicative of a significant internal control deficiency, and do not equate to a compliance finding as the SVOG Expenditure detail has not been submitted to the SBA and the Garden had additional Expenditures from January to May 2021, which met the criteria of allowability, that replaced the identified expenditure errors noted above. 3. CAUSE In FY22, the Garden had an ineffective control in place over the review of Expenditures allocated to the grant. This control was meant to ensure costs allocated to the SVOG Award were allowable. The control in place to review the Expenditures under the SVOG was not designed at a precise enough level to identify the errors that occurred and did not include a thorough review of the Expenditure details. 4. EFFECT Expenditures were included within the SVOG Expenditure details intended to be submitted to the SBA, which were either recorded at an incorrect amount or had to be updated or removed/replaced with other allowable Expenditures. 5. REPEAT FINDING No. 6. RECOMMENDATION We recommend the Garden put a more precise control in place over the review of Expenditures applied to grants and ensure a thorough review of the Expenditure detail is performed prior to the listing being finalized. 7. QUESTIONED COST None. 8. VIEWS OF RESPONSIBLE OFFICIAL The Garden is in the process of performing a thorough review of the expenditures. A secondary review will be performed to improve the accuracy of the required supporting documentation. The program ended on December 31, 2021. Also see ?Corrective Action Plan."