Finding Text
Finding 2022-001: Significant Deficiency – Allowable Costs/Cost Principles
Repeat Finding: 2021-001
Organization did not implement an established and accurate cost allocation
plan during the fiscal year ending June 30, 2022. Therefore, not all costs
were shared among different grants consistently and accurately.
Criteria: Under the U.S. Code of Federal Regulations (CFR), Title 2: Grants and
Agreements, PART 200 - Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards, Subpart E - Cost
Principles Sec. 200.405 Allocable Costs - the cost must be allocated to the
grants/projects based on the proportional benefit. If a cost benefits two or
more grants/projects or activities in proportions that cannot be determined
because of the interrelationship of the work involved, then the costs may be
allocated or transferred to benefitted projects on a reasonable documented
basis.
Condition: During our prior year audit as well as during a monitoring visit by PDE, it was
discovered that certain expenses were allocated to grants on an
unsupported basis. Based on testing of expenditures performed for current
year an accurate cost allocation plan was not accurately developed or
implemented during the fiscal year ended June 30, 2022.
Questioned Costs: None
Cause: The Organization did not create or implement an accurate cost allocation
plan during the current or prior or fiscal year.
Effect: DCLC is not in compliance with 2 CFR Sec. 200.405 - Allocable Costs.
Recommendation: We recommend that DCLC work to develop and implement a written
allocation plan including calculations for all direct and indirect costs that
benefit two or more grants or programs. Specifically, DCLC should review
actual expenses on an ongoing basis and make any necessary adjustments
to the allocated expenses.