Finding Text
2023-001: Overspent Grant
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.243
Compliance and Internal Controls Material Weakness
Category of Finding – Cash Management
Criteria – 2 CFR § 200.302(b), requires entities to have written policies and procedures to accurately track grant accounting. Per the grant agreement, the grant must be earned on a reimbursement basis, which requires eligible expenditures to be incurred in order to earn the grant revenue.
Condition – During fiscal year 2023, IPTF recorded $5,821 more revenue on the SAMSHA grant than the related eligible expenditures.
Cause – IPTF had turnover in the contract accounting function/position. Multiple adjustments were made in the accounting software by the former contract accounting prior to the transition, which were difficult to trace back to and ultimately, actual costs incurred under the grant were miscalculated and overstated.
Effect – As a result of this condition, IPTF was noncompliant with the grant and recognized more revenue than allowed based on eligible costs.
Questioned Costs – $5,821
Recommendation – We recommend that management ensure internal financials are reviewed on a monthly basis to ensure completeness and accuracy, which includes having grant specific financials reviewed by the program managers. Also, we recommend contacting the grantor to discuss the need to repay the $5,821.
Auditee’s comments and response – IPTF hired a new contract accountant in October 2022 and have since implemented processes to ensure accurate internal financial statements are prepared and reviewed by program managers on a monthly basis as required by their written financial policies.
Responsible party for corrective action – Sharon Day, Executive Director
Repeat finding – No