Finding Text
Finding 2022-005: Coding of Indirect Expenses. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Allowable Costs/Costs Principals. Type of finding: Material Noncompliance, Material Weakness. Condition: Indirect costs were not coded in the accounting system to the individual grant. Effect or potential effect: Improper coding of indirect costs in the accounting system to individual grants may result in improper reporting and potential questioned costs. Cause: Lack of appropriate cost allocation policies and reconciliation procedures. Criteria: Uniform Guidance 2 CFR 200.302 (b)(3) requires records to identify adequately the source and application of funds for federally funded activities. Context: Indirect costs in the amount of $46,577 charged to the grant as indirect costs were not coded to the H1-B Job Training Grant class code in the accounting system. Questioned costs: None. Recommendations: We recommend management code indirect costs to individual grants. We recommend management implement a reconciliation process monthly to ensure that indirect costs charged to the grant are properly coded. Views of the responsible officials and planned corrective actions: AJAC has implemented monthly reconciliations to identify all appropriate indirect expenses specific to each grant or contract agreement. All indirect expenses identified as being reimbursable to a specific grant or contract will be reclassified in the accounting software to match the reimbursement request.