Finding Text
Finding 2023-002 – A. Activities Allowed or Unallowed, B. Allowable Costs/Cost Principles, H. Period of Performance and N. Special Tests and Provisions
Identification of the federal program:
Federal Agency: U.S. Department of Homeland Security, Federal Emergency Management Agency (FEMA)
Pass-Through Entities: Missouri State Emergency Management Agency and Illinois Emergency Management Agency
Federal Program: COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) (Assistance Listing No. 97.036)
Pass-Through Award Numbers: Pass-Through Award Periods:
PA-05-IL-4489-PW-1324(1) 01/21/2020–Ongoing
PA-07-MO-4490-PW-00750 04/01/2021–07/01/2022
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303(a) of the Uniform Guidance states the following regarding the auditee and internal control:
“The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Condition:
Management reviewed a sample of FEMA expenses during the fiscal year for compliance with allowability, period of performance, and special tests and provisions requirements. However, the review did not ensure that invoices allocated between multiple project worksheets did not exceed claim in total for management costs. In addition, for materials and supplies costs, the review was not performed timely as it was completed four months after the claim was submitted.
Cause:
Management’s internal control over the review and approval of FEMA expenses (materials and supplies and management costs) for compliance with allowability, period of performance, and special tests and provisions requirements was not properly designed or operating effectively.
Effect or potential effect:
Unallowable expenses could be charged to the FEMA program.
Questioned costs:
None.
Context:
Total FEMA expenditures reported on the schedule of expenditures of federal awards are $3,503,825 for the year ended December 31, 2023. Of this amount, management costs totaled $11,205 and materials and supplies costs totaled $682,254.
Identification as a repeat finding:
This finding is a partial repeat of finding 2022-004 from the prior year.
Recommendation:
Management should reassess its internal controls over the review and approval of FEMA expenses for compliance with allowability, period of performance, and special tests and provisions requirements.
Views of responsible officials:
BJC agrees with the findings as reported. BJC is committed to complying with program requirements and meeting program objectives as defined in Section 200.303(a) of the Uniform Guidance, regarding auditee internal controls. To facilitate these requirements, BJC will review and strengthen controls and documentation to ensure that invoices allocated between multiple project worksheets do not exceed amount claimed in total for management costs. In addition, BJC will ensure reviews are performed timely.