Finding Text
2023-003: Allowable Costs/Cost Principles
Criteria: According to federal regulations, expenditures charged to federal grants must follow the allowable cost principles found in 2 CFR Part 200, subpart E.
Additionally, 2 CFR.200.303 requires nonfederal entities to, among other things, 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.
Condition: During our testing, we noted that expenses submitted on forms for reimbursement were allocated to the wrong budget category line items and did not agree to the underlying accounting records.
Cause: Internal controls surrounding the review and submission of reimbursement requests are not properly implemented to detect and correct errors.
Effect: The costs submitted and reimbursed by the grantors did not agree to the budget categories set forth in the grant agreement, therefore the underlying accounting records were not consistent with what was being reported to the grantors.
Questioned Costs: N/A
Statistical Sampling: Statistical sampling was not used in making sample selections.
Recommendation: We recommend that management of the Organization review internal controls and ensure they are properly designed and implemented to ensure that expenditures are allowable under federal regulations.
Views of Responsible Officials: Management agrees with this finding and their response is included in the corrective action plan.