Finding Text
U.S. Department of Housing and Urban Development
Continuum of Care – Assistance #14.267
#2023-006 – Major Federal Award Finding - Period of Performance Nature of Finding: Compliance Finding Period of Performance and Material Weakness in Internal Controls over Compliance
Criteria/Condition: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. The Organization did not have controls in place to verify that costs were being charged to the award in the correct period of performance.
Questioned Costs: $4,035
Identification of How Questioned Costs Were Computed: A sample of 40 non-payroll expenditures totaling approximately $49,000 was selected from a population of approximately $764,000 of non-payroll expenditures. An amount of $263 from an invoice that was selected for testing of non-payroll expenditures charged to the Continuum of Care program was related to the year ending September 30, 2024 and was inappropriately charged to the grant during 2023. Questioned costs are estimated by projecting the error identified in the sample tested to the population of non-payroll expenditures of the Continuum of Care program.
Cause/Context: There are not proper controls in place to review invoices and assign them to the appropriate grant period. One expenditure out of forty non-payroll related expenditures tested for the Continuum of Care grant was for a contracted monthly service that covered multiple performance periods but was billed in its entirety to the current fiscal year.
Effect: An overstatement of expenditures for the Continuum of Care grant was reported in the current year.
Recommendation: We recommend procedures are established to review for proper grant period when recording transactions and creating monthly reimbursement requests.
Views of Responsible Officials and Planned Corrective Actions:
The Organization will implement the following changes in its accounting procedures:
1. The Staff Accountant will review the period each expenditure is related to and record the invoice to the appropriate period when entering it into accounts payable. The month and year will be noted on the invoice.
2. The CFO will review the month and year noted by the Staff Accountant prior to entry into accounts payable.