FAC Explorer

Finding 396647 (2022-007)

Material Weakness
Requirement
C
Questioned Costs
-
Year
2022
Accepted
2024-05-14
Audit: 306244
Organization: The Astraea Foundation, Inc. (NY)
Auditor: Gelman Rosenberg & Freedman

AI Summary

  • Core Issue: Astraea charged unallowable overhead costs to a Federal grant, violating compliance requirements.
  • Impacted Requirements: Internal control over Federal awards must ensure all expenses are allowable as per 2 CFR 200.303.
  • Recommended Follow-Up: Astraea should implement stricter internal controls for reviewing and approving expenses related to Federal projects.

Finding Text

Finding 2022-007: Unallowable Costs / Cash Management Criteria: As stated in 2 CFR 200.303, the non-Federal entity (i.e. the Organization) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Astraea charged unallowed overhead costs to a Federal grant. These unallowable expenses were charged to the Federal government and cash was collected by Astraea. Cause: Astraea did not have a procedure in place to ensure all expenses charged to the Federal grants were allowable. Context: During the audit, we noted Astaea's internal control processes were not effective, evidenced by the recording and billing of unallowable overhead costs. Effect: Unallowable costs were billed to the Federal Government. Questioned Costs: None noted. These unallowable costs were moved to refundable advance. Identification as a Repeat Finding: No Recommendation: We recommend Astraea develop a more stringent internal control process surrounding the review and approval process for expenses recorded to Federal projects.

Corrective Action Plan

Views of Responsible Officials and Planned Corrective Actions: This unallowable expense was charged inadvertently, and corrections have been made. Astraea is in discussion with the Federal agency about appropriate adjustments to account for this and will take subsequent action per Federal agency instructions. In addition, Astraea is in current discussions with USAID to update the current agreement so that a 10% de minimis overhead cost allocation will be explicitly allowed. Further, Astraea is seeking a NICRA in FY2025. Anticipated Completion Date: June 30, 2024 Responsible Officials: Associate Director, Grants Management and Compliance; Associate Director, Partnerships

Categories

Allowable Costs / Cost Principles Cash Management Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 396643 2022-003
    Material Weakness Repeat
  • 396644 2022-004
    Material Weakness Repeat
  • 396645 2022-005
    Material Weakness Repeat
  • 396646 2022-006
    Material Weakness Repeat
  • 973085 2022-003
    Material Weakness Repeat
  • 973086 2022-004
    Material Weakness Repeat
  • 973087 2022-005
    Material Weakness Repeat
  • 973088 2022-006
    Material Weakness Repeat
  • 973089 2022-007
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
98.001 Usaid Foreign Assistance for Programs Overseas $2.76M
19.345 International Programs to Support Democracy, Human Rights and Labor $171,734