FAC Explorer

Finding 41779 (2022-001)

Significant Deficiency
Requirement
H
Questioned Costs
-
Year
2022
Accepted
2022-11-27
Audit: 40187
Organization: Maxwell C. King Center for the Performing Arts, Inc. (FL)
Auditor: Carr Rigs & Ingram LLC

AI Summary

  • Core Issue: Grant funds were used for marketing expenses incurred before the funding period, violating federal guidelines.
  • Impacted Requirements: Costs must only be charged if incurred during the specified period (March 1, 2020 - June 30, 2022) and approved by the granting agency.
  • Recommended Follow-Up: Ensure all costs are reviewed against grant agreements and compliance requirements to avoid disallowed expenses in the future.

Finding Text

SD 2022-001: PERIOD OF PERFORMANCE Assistance Listing No. 59.075 Shuttered Venue Operators Grant Program 2022 Funding U.S. Small Business Administration Criteria: The Uniform Guidance specifies that a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance. Guidance is found under Standards for Financial and Program Management (200.309). Recipients of the supplemental award can spend all award funds (both initial and supplemental phase awards) received over an 18-month period after the initial phase award issuance date for eligible and allowable costs incurred between March 1, 2020 and June 30, 2022. Pre-award costs can be charged if they are authorized by the federal awarding agency or pass-through entity (200.458). Additionally, under 2 CFR 200.303, non-Federal entities must establish and maintain effective internal controls to provide reasonable assurance of compliance with the Uniform Guidance. Condition: Grant funds were disbursed for marketing expenses incurred prior to the start of the funding period without approval of the granting agency. Marketing expenses incurred prior to March 1, 2020 were applied to the grant as they related to producing a theatrical or live performing arts productions that were scheduled to occur during March and April of 2020 but cancelled due to the impacts of COVID-19. Cause: The control did not operate effectively as the reviewer did not have a sufficient understanding of the grant requirements. Perspective: There was initially $9,344 of expenses applied to the grant. Effect: Shuttered venue operators grant funding was applied to expenses incurred outside the period of availability. Prior to the report being filed the Center utilized other expenses that were within the period of availability. Questioned Costs: $0 Recommendation: Only allowable costs incurred during the period of performance should be charged to the federal award. Supporting documentation should be reviewed in conjunction with the grant agreement and other applicable compliance requirements including statutes and uniform reporting requirements for restrictions, limitations, and conditions pertaining to the grant to minimize the amount of disallowed costs. Management Response: Management concurs with the suggestion. Grant personnel has been reminded to review supporting documentation in conjunction with the grant agreement and other applicable compliance requirements including statutes and uniform reporting requirements for restrictions, limitations, and conditions pertaining to the grant to minimize the amount of disallowed costs.

Corrective Action Plan

CORRECTIVE ACTION PLAN The Maxwell C. King Center for the Performing Arts, Inc. respectively submits the following corrective action plan for the year ended June 30, 2022. Carr, Riggs & Ingram, LLC 215 Baytree Drive Melbourne, Florida 32940 Audit Period: Fiscal Year July 1, 2021 ? June 30, 2022 The findings from the schedule of findings and questioned costs dated November 1, 2022 are discussed below. The findings are numbered consistently with the number assigned in the schedule. MW 2021-001 REVIEW & SEGREATION OF DUTIES Recommendation: We recommend the Center implement procedures to ensure all journal entries, bank reconciliations, payroll registers, settlement statements, and customer invoices are reviewed by someone independent from the preparer, and there is sufficient evidence retained to determine the review occurred. The Center should also implement procedures to ensure purchase orders are reviewed to verify the expenditure is allowable and within budget or funding source restrictions. Additionally, we recommend the Center implement procedures to ensure that billing and the posting of cash receipts are independent of cash handling and the preparation of deposits. Corrective Action: Management concurs with the suggestion. The operations management company has since filled the vacant position that will enhance review procedures and segregation of duties. ASM has committed to the board that they will provide a backup, from another ASM office, in the event of a subsequent position vacancy. This support will continue until the position is filled to ensure no lapse in internal controls will occur as a result of the vacancy. Responsible Party: Ricky Gonzales, Director of Finance, ASM Globa Date Expected to be Corrected: July 1, 2022 SD 2022-001 PERIOD OF PERFORMANCE Recommendation: Only allowable costs incurred during the period of performance should be charged to the federal award. Supporting documentation should be reviewed in conjunction with the grant agreement and other applicable compliance requirements including statutes and uniform reporting requirements for restrictions, limitations, and conditions pertaining to the grant to minimize the amount of disallowed costs. Corrective Action: Management concurs with the suggestion. Grant personnel has been reminded to review supporting documentation in conjunction with the grant agreement and other applicable compliance requirements including statutes and uniform reporting requirements for restrictions, limitations, and conditions pertaining to the grant to minimize the amount of disallowed costs. Responsible Party: Cindy Anderson, AVP, Financial Services, EFSC Accounting Date Expected to be Corrected: October 10, 2022

Categories

Period of Performance

Other Findings in this Audit

  • 618221 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
59.075 Covid-19 Shuttered Venue Operators Grant Program $3.02M