Finding 499755 (2023-003)

Significant Deficiency
Requirement
H
Questioned Costs
-
Year
2023
Accepted
2024-09-30

AI Summary

  • Core Issue: The Global Center charged an expense to a follow-on award before the official start date of the period of performance.
  • Impacted Requirements: This action violated 2 CFR Part 200, which mandates compliance with the specified period of performance for federal awards.
  • Recommended Follow-Up: The Global Center should wait for written approval from the donor before recording any expenses outside the designated period of performance.

Finding Text

Finding 2023-003: Period of Performance Federal Program: ALN 19.701 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR Part 200, Uniform Guidance, §200.309 - Period of Performance, Federal awards must comply with the specified period of performance outlined in the award documentation. The period of performance defines the timeframe during which the recipient may incur costs and complete the project or program objectives. Condition: During the audit period, the Global Center had two active awards serving nearly identical purposes. The first award concluded in September 2023, at which point the follow-on award commenced. In July 2023, the Global Center incurred an expense, believing it could be charged to the follow-on award. The Global Center requested authorization from the donor to charge the cost to the award, even though it was incurred prior to the commencement of the period of performance. While awaiting confirmation from the donor, the Global Center went ahead and billed the expense to the award. The donor, however, took nearly a year to respond and ultimately ruled the cost unallowable. The Global Center subsequently reclassified the cost out of the award. Cause: Administrative delays and miscommunication with the donor. Effect or Potential Effect: As a result of initially recording an expense incurred prior to the commencement of the period of performance before it had specific authorization to do so, the Global Center inadvertently drew down funds for this unapproved cost. Questioned Costs: None noted Context: By recording the expense before receiving donor confirmation, the Global Center risks incurring and claiming costs outside of the allowable period for reimbursement. Identification as a Repeat Finding: Not applicable Recommendation: The Global Center should refrain from recording any expenses outside the period of performance until written approval is received from the donor, ensuring compliance with award guidelines.

Corrective Action Plan

Views of Responsible Officials: Management acknowledges that prior approval must be received before allocating any cost to an award that is incurred outside of the period of performance. While in this case approval was ultimately not granted, the cost was returned to the original project and removed from the affected project and subsequent drawdowns adjusted accordingly. To avoid incurring costs outside the period of performance, the following actions will be implemented:  Update the Global Center procurement guidelines to explicitly emphasize period of performance requirements when incurring expenses on grants and contracts.  Systematically confirm all purchase requests, vendor contracts, consulting agreements and subawards fall within the period of performance by including the start and end date of the grant or contract on all associated documentation. Responsible Officials: Daniel Grimshaw, Director of Finance Anticipated Completion Date: December 31, 2024

Categories

Period of Performance Allowable Costs / Cost Principles Cash Management

Other Findings in this Audit

  • 499754 2023-002
    Significant Deficiency
  • 499756 2023-002
    Significant Deficiency
  • 499757 2023-003
    Significant Deficiency
  • 499758 2023-002
    Significant Deficiency
  • 499759 2023-003
    Significant Deficiency
  • 499760 2023-002
    Significant Deficiency
  • 499761 2023-003
    Significant Deficiency
  • 1076196 2023-002
    Significant Deficiency
  • 1076197 2023-003
    Significant Deficiency
  • 1076198 2023-002
    Significant Deficiency
  • 1076199 2023-003
    Significant Deficiency
  • 1076200 2023-002
    Significant Deficiency
  • 1076201 2023-003
    Significant Deficiency
  • 1076202 2023-002
    Significant Deficiency
  • 1076203 2023-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
19.701 Global Counterterrorism Programs $1.03M
19.124 East Asia and Pacific Grants Program $289,755