Finding Text
Federal Agency: U.S. Small Business Administration
Federal Program: 59.075 Shuttered Venue Operators Grant Program
Identification Number: SBAHQ21SV012046.2
Requirement: Period of Performance
Type of Finding: Significant deficiency in internal control over major program
Criteria: The period to incur costs was 3/1/2020 and 6/30/2022. The U.S. Small Business Administration’s Shuttered Venue Operators Grant webinar on Auditing and the Compliance Supplement notes that a cost is incurred when the obligation for payment has been made.
Condition: Program expenditures included costs that were incurred outside the period of performance.
Cause: Management does not have an adequate understanding of federal program requirements.
Effect: Inclusion of costs outside the period of performance may lead to federal inquiries of those charged with governance and could cause the federal agency to request a refund for those costs.
Context: Four transactions tested included advertising and janitorial services which were performed in February 2020. The obligation for payment was made when the services were performed.
Recommendation: Program management should review program definitions and attend federal agency webinars to ensure complete and accurate understanding of program standards.
Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.