Finding Text
2023- 010 – Allocation and Documentation of Cash Disbursements
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Homeless Services and CARES
Assistance Listing Number: 14.231
Pass-Through Agencies: All Chicago and Chicago Department of Family and Support Services
Pass-Through Numbers: N/A
Award Periods: January 1, 2022 through December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or Specific Requirement:
Under allowable cost/cost principles, an organization in receipt of federal funding is required to have a system of controls in place to safeguard assets and ensure that only allowable costs are charged to federal programs. 2 CFR Part 200 states that costs may be allocated or transferred to benefitted projects on any reasonable documented basis.
Condition:
In testing a sample of 15 items, we identified the following:
• 9 out of the 15 transactions tested did not have back up to support the amount allocated.
• 3 out of the 15 transactions tested were for June 2022 expenses that were improperly included on the 2023 schedule of expenditures of federal awards ($717), resulting in improper cut-off at the prior year-end.
Questioned Costs:
$717
Context:
Disbursements are not being properly documented for the allocation methodology being used and prior year expenses were improperly included in the current year.
Cause:
Procedures for the allocation of general disbursements in full compliance with the Uniform Guidance have not yet been fully implemented.
Effect:
Inaccurate costs may be charged to federal programs if The Blvd does not have procedures in place to monitor and record general disbursements devoted to federal programs.
Repeat Finding:
This is a repeat finding.
Recommendation:
Management should develop a process whereby general disbursements allocated to federal grants are supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated and support the distribution of the disbursement among specific activities or cost objectives if the disbursement is allocated to more than one federally funded program. These estimates should be properly reflected during the vouchering process, and ensure recording in the proper year.
Views of responsible officials and planned corrective actions:
There is no disagreement with the audit finding. A modified policy will be established to ensure costs are reasonable, allowable, and allocable to a State, Federal, local, and private awards shall be charged to that award directly or indirectly. All unallowable costs shall be appropriately segregated from allowable costs in the general ledger in order to assure that unallowable costs are not charged to such awards. Any Indirect costs that either benefit more than one award (overhead costs) or non-award function or that are necessary for the overall operation of The Boulevard of Chicago will be allocated based upon an approved allocation method such as time and tracking or occupancy.
Name of the Contact Person Responsible for Corrective Action:
Bo Gasic, CFO
Planned Completion Date for Corrective Action Plan: Immediately