Finding Text
Federal Agency: United States Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds
AL Number: 21.027 Significant Deficiency in Internal Control over Compliance - Allowable Costs Finding 2023-002 Finding – Federal Award
Federal Agency: United States Department of the Treasury
Federal Program: Coronavirus State and Local Fiscal Recovery Funds
AL Number: 21.027
Type: Significant Deficiency in Internal Control over Compliance - Allowable Costs.
Criteria/Requirement:
Costs attributable to common or joint use of facilities or services by Treasury programs and other
programs must be fairly allocated among the various programs that utilize such services (42 USC
9839(c)).
Condition:
Appropriate supporting documentation was not maintained to support expenditures allocated to
federal programs when the allocation was changed subsequent to the original journal entry. We
identified 2 of the 25 expenditures tested in our statistically valid sample that did not agree with the
documented cost allocation plan. Upon inquiry, management noted that the allocation had to be
corrected in a subsequent entry, but documentation of the approved change was not maintained.
Context:
Expenditures should be charged to the proper programs and allocated in accordance with the cost
allocation plan and documentation of approval of any subsequent change to the allocation plan
should be maintained.
Cause:
Lack of oversight of the cost allocation processes and procedures within the Organization resulted
in no documentation of approval for costs allocated between programs.
Effect:
Grant expenses charged to programs were not supported by documentation of approval.
Questioned Costs: None.
Recommendation:
We recommend management implement procedures to ensure that costs charged to the grant
follow the approved cost allocation and documentation of approved changes to allocations be
maintained.
Views of responsible official: Management concurs with the auditors’ finding and will enhance
documentation protocols, standardize the approval process, and have regular reviewing and
monitoring.