Finding Text
Finding No. 2022-002 Allowable Costs/Cost Principles Fiscal Year: 2021-2022 Criteria The cost principles in 2 CFR Part 200, Subpart E (Cost Principles), prescribed the cost accounting requirements associated with the administration of federal awards by nonprofit organizations. The Basic Guidelines stated that costs must meet several general criteria in order to be allowable under federal awards. One criterion is that costs must be adequately documented. Condition For payroll testing, 1 out of 40 selections did not have evidence of correct pay rate was used for employee?s paycheck. Questioned Costs $161 Cause The Organization did not comply with cost principles under 2 CFR Part 200, Subpart E Cost Principles basic guideline on adequate documentation of costs. Effect This finding falls under the audit area of Allowable costs/Cost principles. Material noncompliance for this assertion has been determined as an error rate greater than $61,000, individually and/or in aggregate. In evaluating the finding, auditors determined that the finding does not rise to the level of a significant deficiency or a material weakness. Recommendation We recommend that the Organization strengthen its documentation procedures on costs charged to federal awards to be in compliance with 2 CFR Part 200, Subpart E Cost Principles basic guidelines.