Finding 48474 (2022-001)

Significant Deficiency
Requirement
ABGH
Questioned Costs
-
Year
2022
Accepted
2023-03-22
Audit: 53569
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: Internal controls over federal award compliance were inadequate, leading to claims for costs outside the allowed period and for unutilized materials.
  • Impacted Requirements: Compliance with 2 CFR 200.303(a) regarding effective internal control over federal awards was not maintained.
  • Recommended Follow-Up: The Cooperative should enhance its tracking processes for labor costs and materials to ensure accurate reimbursement submissions.

Finding Text

2022-001 Department of Homeland Security, State of Idaho Office of Emergency Management, 97.036, FEMA-DR-4589-ID Disaster Grants ? Public Assistance Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Matching, and Period of Performance Significant Deficiency in Internal Control over Compliance 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. Condition: Administrative labor costs were claimed for reimbursement and match that fell outside the period of performance of the federal award in two instances. In addition, we noted one instance in which the Cooperative submitted a material cost for reimbursement and match that was not used in the project. Cause: The labor costs related to the day before the start of the period of performance. A transposition error of one additional pole was made on the reimbursement spreadsheet. Effect: The Cooperative?s control process and procedures did not detect or correct the errors. Concerning the costs of administrative labor, the Cooperative submitted $352 for reimbursement and 10% match of $39 for five hours of labor. Concerning the costs of materials, the Cooperative submitted $525 for reimbursement and 10% match of $58 for one additional pole. Questioned Costs: No questioned costs over $25,000. Context/Sampling: Nonstatistical sampling was used. Sample size was 60 transactions which accounted for $694,499 out of $1,494,894 of federal program expenditures of which $1,345,404 was submitted for reimbursement and $149,490 was considered the 10% matching portion. Repeat Finding form Prior Year: No Recommendation: We recommend the Cooperative continue to review the process over the tracking of labor costs and materials to ensure accuracy of costs submitted for reimbursement. Views of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

Finding 2022-001 Federal Agency Name: Department of Homeland Security, State of Idaho Office of Emergency Management Program Name: Disaster Grants ? Public Assistance CFDA # 97.036 Finding Summary: Administrative labor costs were claimed for reimbursement that fell outside the period of performance of the federal award in two instances. In addition, one instance in which the Cooperative submitted a material cost for reimbursement that was not used in the project. Responsible Individuals: Reed Christensen Corrective Action Plan: Management revised its procedures to ensure a review of labor hours submitted in the future for FEMA-reimbursed projects in order to ensure the labor hours submitted fall more precisely within the Federally specified timeframe of the disaster declaration. As it concerns material cost reimbursements, in the future the work order will be reviewed and reconciled to the ?pick list? quantities. This has also been added to our FEMA-related work procedure. Anticipated Completion Date: March 30, 2023

Categories

Allowable Costs / Cost Principles Period of Performance Cash Management Significant Deficiency Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 624916 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $1.35M