Finding Text
Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the Federal award that provides assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.306(b) identifies the requirements for all Federal awards that any shared costs or matching funds and all contributions, including cash and third-party in-kind contributions, must be accepted as part of the non-
Federal entity's cost sharing or matching when such contributions meet all of the following criteria:
(1) Are verifiable from the non-Federal entity's records;
(2) Are not included as contributions for any other Federal award;
(3) Are necessary and reasonable for accomplishment of project or program objectives;
(4) Are allowable under 2 CFR 200 Subpart E;
(5) Are not paid by the Federal Government under another Federal award, except where the Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs;
(6) Are provided for in the approved budget when required by the Federal awarding agency; and
(7) Conform to other provisions of this part, as applicable.
Condition: During our testing, the Corporation was unable to provide sufficient and appropriate evidence to substantiate that the matched or shared cost were received and accepted in conformance with the criteria listed above or award agreement.
Cause: The Corporation did not have formal policies and procedures over matching or cost sharing.
Effect or Potential Effect: Without proper internal controls and policies and procedures in place to monitor and review the matching requirements could result in Federal noncompliance.
Questioned costs: None
Context: This is a condition identified per review of the Corporation’s compliance with specified requirements over matching or cost sharing.
Repeat finding: No
Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating to the matching requirements of the related grant award.
View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation did not maintain sufficient or appropriate evidence to substantiate that the matched or shared cost were spent in conformance with the criteria listed above or award agreement.