Finding 419 (2023-001)

Significant Deficiency
Requirement
B
Questioned Costs
-
Year
2023
Accepted
2023-10-20
Audit: 868

AI Summary

  • Core Issue: There is a significant deficiency in how costs are charged to federal awards, specifically related to inaccurate rent expense allocations.
  • Impacted Requirements: Costs must be supported by accurate accounting records, which was not the case for three months of testing.
  • Recommended Follow-Up: Implement regular reconciliations of contract billings to accounting records and ensure thorough reviews before invoicing the government.

Finding Text

Type: Significant deficiency regarding allowable costs Assistance Listing Number: U.S. Department of Justice 16.526 Requirement: Costs charged to federal awards should be supported by the accounting records. Condition/Context: For three months tested, amounts charged to the grant for allocated rent expenses were inaccurate or did not agree to the accounting records, resulting in insignificant over and under billings. Cause: This was an oversight in the review of allocations and contract billings. Effect: Inaccurate amounts could be charged to the contract and reimbursed. Questioned Costs: None noted. Recommendation: We recommend reconciling contract billings to the accounting records and a review of the reconciliation before invoicing the government agency. Management’s Response: NCVLI has engaged the services of a contract accounting firm for fiscal year 2023-24. This accounting firm will assist with monthly financial transactions, maintaining accounting records and assisting with billings. This firm will work closely with the Director of Administration & Operations (DAO). Among the benefits of this additional layer of support for accounting work is a new process for rent allocations which ensures calculations are reviewed and affirmed by multiple people. Rent allocations are generated by the accounting firm and reviewed by the DAO prior to generation of billings. Billings will then be generated by the DAO with assistance from the accounting firm and will continue to be reviewed and approved by the Executive Director prior to submission to federal agencies. As an additional check, regular internal review of monthly payroll and rent allocations will be conducted by a member of the management team other than the DAO to ensure supporting documentation and reports from accounting system align and support allocations.

Categories

Allowable Costs / Cost Principles Significant Deficiency

Other Findings in this Audit

  • 416 2023-001
    Significant Deficiency
  • 417 2023-001
    Significant Deficiency
  • 418 2023-001
    Significant Deficiency
  • 576858 2023-001
    Significant Deficiency
  • 576859 2023-001
    Significant Deficiency
  • 576860 2023-001
    Significant Deficiency
  • 576861 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
16.582 Crime Victim Assistance/discretionary Grants $10,203
16.526 Ovw Technical Assistance Initiative $6,285