Finding Text
Section 3 - Federal and State Award Findings and Questioned Costs
Significant Deficiency
Indirect Cost Rate
Prevention and Treatment of Substance Abuse, CFDA #93.959, Pass-Through Grant #HHS000539700192
Criteria: The Organization is required to utilize a state-issued provisional rate to allocate indirect costs to the associated programs. Condition: Indirect costs reported for the associated programs under pass-through grant #HHS000539700192 exceeded the state-issued rate for the year ended August 31, 2023 by approximately $66,560.
Cause: The Organization implemented a new accounting system in fiscal year 2023, and the indirect allocations were configured to automatically run in the system. However, the configuration was not set up to appropriately bifurcate the indirect cost rate amounts from unreportable expenses, resulting in an overstatement of indirect costs reported for the programs. Additionally, there was not an adequate review process in place by management to detect this specific issue.
Effect: Expenditures for CFDA #93.959, Pass-Through Grant #HHS000539700192 were overstated by approximately $66,560 related to disallowed indirect costs.
Questioned Costs: Indirect costs for CFDA #93.959, Pass-Through Grant #HHS000539700192, totaling approximately $66,560.
Context: The finding was isolated to indirect costs only and no findings were identified related to direct costs or other compliance requirements. Additionally, this was the first year the state-issued indirect cost rate was effective for BVCASA, and the Organization has not had a history of any findings related to unallowable expenses in the last several years.
Repeat Finding: No
Recommendation: Implement review process to recalculate indirect cost rate allocated by the system each month to ensure the amounts are in compliance with the state-issued rate prior to reporting.
Views of Responsible Officials and Planned Corrections Actions: Management agrees with the audit finding and a response is included in the corrective action plan.