Finding 391704 (2023-003)

2023-3 Assistance Listing 93.917 HIV Care Formula Grants (Ryan White HIV/Aids Program Part B) Allowable Cost/Cost Principles Condition and Perspective Information: Accounting records do not accurately reflect the amounts reported on program reimbursement requests. The Organization did not have supporting timesheets for salary allocations. The Organization used budget allocations that were not supported by actual results. Criteria: Accounting records should be an accurate representation of the financial activity throughout the year as evidenced in the general ledger. Allowable costs are to be supported by detailed records and allocations are supported by actual results. Cause: Budget were believed to be fair estimates. Effect: Noncompliance with Allowable Cost/Cost Principles. Questioned Costs: Unknown. Repeated Finding: No. Recommendation: The Organization should record the actual amounts spent by each program and government funding source in their accounting records. Views of responsible officials of the auditee: Open Arms Minnesota processes and systems are structured around meal production, as such management is unable to adequately segregate program expenses for one grant. There is no disagreement with the audit finding. Summary of Corrective Action Plan: The Organization will prepare grant reimbursements using the percentage of meals prepared for allocation of allowable costs. They will also use information that is supported by the general ledger to prepare grant reimbursements.