Type of Finding:
• Significant Deficiency in Internal Control over Compliance – Allowable Costs/Cost Principles
• Other Matter – Non-Compliance with Allowable Costs/Cost Principles Compliance Requirements
Federal Agency: Department of Transportation
Federal Program Name: Enhanced Mobility of Seniors and Individuals with Disabilities
Assistance Listing Number: 20.513
Federal Award Identification Number and Year: PTD0287-2022
Pass-Through Agency: WADOT
Pass-Through Number(s): PTD0287
Award Period: July 1, 2021 through June 30, 2023
Criteria or specific requirement: 2 CFR 200.423 specifically identifies alcoholic beverages as unallowable costs.
Condition: CLA noted one sample in which federal funds were expended on unallowable costs.
Questioned costs: $85 known, $910 likely
Context: A sample of 25 was made from a population of 942 nonpayroll-related general disbursement costs charged to the major program. Of the 25 sampled costs, one was found to be out of compliance with the requirements of Allowable Costs / Cost Principles, totaling $85. Sampled nonpayroll-related general disbursement costs totaled $24,560. General disbursements totaled $263,090 of the $1,706,762 tracked to the major program. Extrapolating the error to the actual costs reported on the SEFA results in a likely questioned cost amount of $910.
Cause: The individual in charge of entering the purchase into Microix did not code the alcoholic beverages to a separate general ledger account that was established to track unallowable costs so that they are not charged to the federal programs.
Effect: Without adequate controls in place to ensure costs are allowable, Sound Generations runs the risk of being out of compliance with not only the major program but all federal programs.
Repeat Finding: No.
Recommendation: CLA recommends that emphasis be placed (via an employee training or organization-wide email) on specifically disallowed costs and the importance of tracking these costs separately so that they are not charged to federal programs.
Views of responsible officials and planned corrective actions: Sound Generations agrees with the finding. Sound Generations has implemented the following additional practices and policies:
1) Allowable costs and expenditures in Federal Grants and Contracts training to all Authorized
Purchasers. - to be completed in the first quarter of 2024 and annually thereafter.
2) Additional General Ledger Codes to record unallowable costs: implemented in July 2023
3) Automating unallowable expenses to be excluded in grant and contract reporting and expense
reimbursements. - implemented in July 2023
Responsible Official: Chief Financial Officer; Christina Hannan, Controller
Anticipated Completion Date: March 31, 2024