Finding 478368 (2021-002)

Lack of Prior Approval Before Making Capital Improvement and Equipment Expenditures Condition: The Organization made capital improvement expenditures to the building owned by its financially interrelated entity and purchased equipment for the Organization with CARES Act funding that exceeded an acquisition cost of $5,000. Prior written approval was not obtained from the awarding agency before making these expenditures. Criteria: Regulations require that prior written approval be obtained from the awarding agency or passthrough entity prior to making certain expenditures. Cause: The CARES Act grant was a new program with limited funding guidance available at the onset of grant awarding. Also, policies and procedures were not functioning properly to ensure that the required prior approvals were obtained. Effect: Certain expenditures were made during the year ended September 30, 2021 which lacked approval per 45 CFR 75.439. Recommendation: Develop policies and procedures to ensure that the required approvals are obtained in advance of incurring these expenditures. Views of the responsible officials and planned corrective action: The Organization agrees with the finding and will develop and implement policies and procedures to ensure prior approvals are obtained. See current year corrective action plan.