Finding 391617 (2023-006)

SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued) Ref. No. Compliance and Internal Control over Compliance Findings 2023-005 Allowable Costs – Material Weakness Federal agency: Department of Justice Programs Pass-Through Entity: State of Hawaii Department of the Attorney General Program: ALN No. 16.575 Crime Victim Assistance Criteria: Allowable costs are those costs consistent with the principles set forth in the Uniform Guidance 2 CFR §200 Subpart E – Cost Principles, and found in the laws, regulations, and the provisions of contracts or grant agreements pertaining to the Crime Victim Assistance Program (Program). 2 CFR §200.400 – Policy guide states that the application of the cost principles is based on the fundamental premises that the County, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award. In addition, the County’s accounting practices must be consistent with the cost principles and support the accumulation of costs as required by the principles, and must provide for adequate documentation to support costs charged to the Federal award. 2 CFR §200.430 – Compensation for personal services states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees is reasonable for services rendered and conforms to the established written policy of the County and is determined and supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The County recovers all expenditures through reimbursements from the State of Hawaii Attorney General’s (SOH AG) office on a monthly basis. The Account Clerk prepares a Request for Funds and Cash Balance Form (RFF) for submission and review. All expenditures are summarized using the County’s Finance Enterprise (FE) Form for the respective reimbursement period and is included in the RFF submitted to the SOH AG’s office for reimbursement. Condition: During our testing of allowable costs related to non-payroll expenditures, we noted the following: • Twenty-five (25) out of 25 instances where the County was unable to provide the FE Form for the respective RFF. During our testing of the allowable costs related to payroll expenditures, we noted the following: • Sixteen (16) out of 16 instances where the County was unable to locate the RFF for payroll costs. Cause: The County did not follow its procedures to prepare and review adequate documentation to support the accumulation of costs charged. Effect: Review and preparation of adequate documentation to support accumulated costs help to ensure that the Federal award is used for authorized purposes and is being administered in accordance to 2 CFR §200 Subpart E. Questioned Cost: $ -- Recommendation We recommend the County follow their internal control process to ensure that adequate documentation supports the accumulation of costs charged to the Program as required by 2 CFR §200 Subpart E. Views of Responsible Officials and Planned Corrective Action The County agrees with the finding and the recommendation. See Part IV Corrective Action Plan