Finding No. 2023-002 Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Description of Finding: Title 2 U.S. Code of Federal Regulations Part 200 establishes cost principles for determining costs applicable to federal awards. These principles include the requirement that cost allocation methodologies be reasonable and documented and that all expenses charged to federal awards are appropriately supported. HEDCO, Inc. does not have a documented cost allocation plan and expenditures reported on submitted grant reports did not reconcile directly back to the underlying accounting records.
Statement of Concurrence or Nonconcurrence: Management concurs with the finding.
Corrective Action: HEDCO, Inc. agrees with the audit finding and has taken this as an opportunity to improve its financial operations. HEDCO, Inc. is documenting a non-profit Cost Allocation Plan that will serve as the foundation to properly account for the use of funds received, and updating internal processes and procedures as needed.
The Plan outlines the procedures and methodologies to allocate direct and indirect costs across various programs, projects, and funding sources within HEDCO, Inc. It is designed to improve and ensure transparency, compliance, and accountability in its financial operations.
Name of Contact Person: Patricia R. Geronimo, CPA - Chief Financial Officer (860) 527-1301 ext. 212 patriciag@hedcoinc.com
Projected Completion Date: HEDCO, Inc. anticipates preparing its Cost Allocation Plan no later than March 31 , 2024. The allocation of costs will be reviewed monthly to ensure proper accountability.