Finding Text
Finding 2022-001: Noncompliance over activities allowed or unallowed, allowable costs/cost principles, and period of performance related to amounts reimbursed for project worksheets. Identification of the federal program: Assistance Listing Number 97.036: ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) ? U.S. Department of Homeland Security ? Federal award identification number: o Application titles: ? 662759 ? Emergency Work Group #2 ? 662754 ? Emergency Work Group #2 o Application numbers: ? PA-06-LA-4611-PW-01437 ? PA-06-LA-4611-PW-01457 ? Federal award year: o August 29, 2021 to October 10, 2021 o October 11, 2021 to April 17, 2022 ? Pass-through entity ? State of Louisiana Governor?s Office of Homeland Security and Emergency Preparedness Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR, Part 200, Section 200.84 ? Questioned costs states a questioned cost as either (a) which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds; (b) where the costs, at the time of the audit, are not supported by adequate documentation; or (c) where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances. 2 CFR, Part 200, Section 200.406 ? Applicable credits states (a) applicable credits refer to those receipts or reduction-of-expenditure-type transactions that offset or reduce expense items allocable to the Federal award as direct or indirect costs. Examples of such transactions are: purchase discounts, rebates or allowances, recoveries or indemnities on losses, insurance refunds or rebates, and adjustments of overpayments or erroneous charges. To the extent that such credits accruing to or received by the non-Federal entity relate to allowable costs, they must be credited to the Federal award either as a cost reduction or cash refund, as appropriate. The Office of Management and Budget Compliance Supplement states the Federal Emergency Management Agency (FEMA) evaluates the eligibility of all costs claimed by the applicant. Not all costs incurred as a result of the incident are eligible. Costs must be: reduced by all applicable credits. Condition: During our testing over expenditures reimbursed by FEMA, we observed reported expenditures in the project worksheets were not reduced by all applicable credits resulting in an overstatement of the amount reimbursed by FEMA. Cause: Certain expenditures in the project worksheets submitted to FEMA for reimbursement were not reduced by all applicable credits. Effect or potential effect: Management was reimbursement by FEMA for expenditures that were not reduced by all applicable credits. Questioned costs: $99,285 ? Assistance Listing Number 97.036 ? Federal award identification number: o Application titles: ? 662759 ? Emergency Work Group #2 ? 662754 ? Emergency Work Group #2 o Application numbers: ? PA-06-LA-4611-PW-01437 ? PA-06-LA-4611-PW-01457 Questioned costs were computed by calculating the difference between the impacted expenditures submitted to FEMA in the amount of $923,105 and the expenditures value after reducing for all applicable credits in the amount of $823,820 resulting in $99,285. Context: During our testing over activities allowed or unallowed, allowable costs/cost principles, and period of performance, we obtained a listing of expenditures submitted for reimbursement to FEMA for the impacted project worksheets and observed 130 expenditures in the listing for a total value of $923,105 (total value factoring in the cost share was $888,900). We selected a sample of 21 for testing over activities allowed or unallowed and allowable costs/cost principals and a sample of 24 for testing over period of performance. There were certain expenditures identified in the sample selected that were not reduced for all applicable credits (i.e., the vendor provided a credit back to the entity for a previously paid invoice). Management evaluated the entire population of expenditures, and it was identified that $99,285 was the difference between the submitted expenditures value to FEMA and the expenditures value after reducing for all applicable credits. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that management refund the questioned costs to FEMA and ensure future project worksheets are reduced for all applicable credits. Views of responsible officials: Ochsner will reach out to FEMA/GOHSEP to self-report the issue and ask that these PWs be moved to closeout (this can be done because both PWs have been paid in full). Ochsner will also work with FEMA/GOHSEP to refund the total overpayment of $99,285 ? either via direct payment or reduction of future reimbursement under Ochsner?s other outstanding PWs with FEMA for COVID-19 and Hurricane Ida. For future FEMA claims, Ochsner will continue to work to ensure that PWs are reduced for all applicable credits using the most accurate information available ? either at the time the PWs are submitted or during closeout.