Finding Text
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles
Identification of the Federal Program:
Assistance Listing Number: 14.218
Assistance Listing Title: Community Development Block Grants/Entitlement Grants
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Entity: County of San Bernardino Community Development and Housing
Federal Award Identification Number: ADEL-18-1-03K-0134
ADEL-19-CV-2-05Q/0190
Assistance Listing Number: 21.019
Assistance Listing Title: Coronavirus Relief Fund
Federal Agency: Department of Treasury
Pass-Through Entity: State of California Department of Finance
County of San Bernardino
Federal Award Identification Number: N/A
CARES21-ALLC-ADE
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):
Pursuant to Code of Federal Regulation §200.403 Requirements for pass-through entities.
Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:
(a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.
(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items.
(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity.
(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.
Finding 2021-006 Allowable Costs/Cost Principles – Internal Control and Compliance over Allowable Costs/Cost Principles (Continued)
Condition:
Community Development Block Grants/Entitlement Grants
During our audit, we noted that two (2) out of four (4) samples summed up to $17,060 had no proper source documents to indicate the procurement and payment were properly approved.
Coronavirus Relief Fund
During our audit, we noted that three (3) out of ten (10) samples summed up to $79,085 had no proper source documents to indicate the procurement and payment were properly approved.
Cause:
The City was not able to safeguard the documents substantiating the transactions being charged to the grant.
Effect or Potential Effect:
The City did not comply with the CFR’s requirements for allowable costs. There is an increased risk that the charges do not represent the actual costs incurred.
Questioned Costs:
Known questionable costs $96,145.
Context:
See condition above for the context of the finding.
Identification as a Repeat Finding, If Applicable:
Not applicable.
Recommendation:
We recommended the City to strengthen safeguarding of source documents to properly substantiate the charges made to the grant.
Views of Responsible Officials:
Management concurs the finding.
(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part.
(f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b).
(g) Be adequately documented. See also §§ 200.300 through 200.309 of this part.
(h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).