Finding 366867 (2023-002)

2023-002 Allowable Costs/Activities Allowed Funding Agency: U.S. Department of Veterans Affairs Direct Funding Grant: Homeless Providers Grant and Per Diem Program Assistance Listing Number: 64.024 Criteria: Funds spent under the grant must be allowed under Title 2 U.S. Code of Federal Regulations Part 200 Subpart E, Cost Principles (“Cost Principles”). Condition: During the course of the auditing procedures we noted that the Organization did not have expenditures to support the total amount reported as expended under the grant. Questioned costs: $133,491 Context: Of the $420,286 reported as expenditures under the grant, the Organization only had detail and supporting accounting records for $286,795. Effect: The costs could be deemed to be unallowable and have to be returned to the grantor. Cause: Due to an ineffective review process of the costs charged to the grant compared to the total recognized as revenue and reported as expenditures. Recommendation: Management should ensure all cost expenditures are properly documented and supported before being charged to the grant. Any funds received more than actual federal expenditures should be recorded as a refundable advance. Grantee Comment: Refer to Corrective Action Plan