Finding Text
Finding 2022-001: Material Weakness in Compliance and Internal Controls Over Compliance for Unallowable Costs Federal Agency: U.S. Department of Justice Program Title: Victims of Crime Act CFDA Number: 16.575 Pass-Through Entity: Missouri Department of Social Services Award Number: ER130200006 Award Period: November 1, 2019 to March 31, 2022 Criteria ALIVE, Inc. is responsible for ensuring expenditures are not used multiple times for reimbursement from federally funded sources. Condition Subsequent to year end, it came to the attention of the auditor that ALIVE, Inc. applied for the Employee Retention Credit using expenditures that had been previously reimbursed by the federal grant for periods during the year ending March 31, 2022. Cause Failure to appropriately communicate with contracted individual who provides additional oversight, ALIVE, Inc. contracted with a third party who had a conflict of interest and inappropriately applied for the Employee Retention Credit. Effect Received funding of over $550,000 for expenditures previously reimbursed by federal sources. Repeat Finding Not Applicable. Questioned Costs $550,000 Recommendation ALIVE, Inc. needs to refund funds from the Employee Retention Credit immediately. ALIVE, Inc. also needs to hire and retain an individual who has nonprofit and federal award experience. Management needs to communicate more effectively and follow the guidance of those who have appropriate nonprofit and federal award experience. Response by Auditee In direct response to this finding, the Employee Retention Credit funds that were erroneously applied for and awarded to ALIVE through ERC Specialists were returned to the IRS on October 20, 2022.