Finding Text
Condition: The SSVF Program Office performed a review to determine whether the Foundation
complied with applicable laws, rules, and regulations. During their review, they discovered that shared
administrative expenditures allocated to the program had inadequate detail and supporting
documentation.
Criteria: Payment of SSVF grant funds up to the amount specified in the SSVF grant agreement will
be made only for appropriately documented eligible expenses that are allowable, allocable, and reasonable costs of operating a program under the Supportive Services grant. Eligible expenses must
be in accordance with the applicable Federal Cost Principles set forth in OMB Circular A-122, Cost
Principles for Non-Profit Organizations, codified at 2 Code of Federal Regulations (CFR) Part 235.
In addition, grantees must use adequate financial management systems that follow generally accepted
accounting principles (GAAP) and provide adequate fiscal control and accounting records, including
cost accounting records supported by documentation. Grantees’ financial management systems must
comply with the requirements of 38 CFR 49.21. Grantees must also maintain all back up documentation
and invoices to support the costs paid with SSVF funds.
Cause and effect: The Foundation’s accounting software does not provide a detailed breakout of
allocated administrative expenses once the previous month has been closed out. Individual general
ledger line items can no longer be viewed; therefore, audit testing cannot be conducted for those
amounts.
Recommendation: I recommend that the Foundation continue plans to submit a modified
administrative cost approach plan and once approved, update the organization’s policies and
procedures to include the new processes. In the interim, the finance team should generate and print
monthly administrative cost allocation reports to ensure there is a monthly record of the breakout of the
administrative costs.
Views of Responsible Officials: We have submitted a modified administrative cost approach plan
(MACA) to the VA on December 8, 2023, and we are waiting for approval. We are working with our
outside CPA firm to update our policies and procedures accounting for the new MACA plan
implementation once it is approved. In the interim, we have already begun running detailed reports of
allocations each month. We have also adjusted the VA grant to only apply direct cost for any
administrative charges until the MACA is approved.