Finding Text
Finding No.: 2021-008
Pass-Through Entity: Republic of the Marshall Islands
Federal Agency: U.S. Department of the Interior
AL Program: 15.875 Economic, Social and Political Development of the Territories
Federal Award No.: Compact of Free Association Program, As Amended
Area: Period of Performance
Questioned Costs: $2,107
Criteria: The terms of the sub-awards administered by RepMar under the Compact of Free Association grant awards stipulate the period of performance during which time only costs resulting from obligations of the funding period may be charged.
Condition: For three (or 9%) of thirty-two items, aggregating $29,888 of $1,479,778 in total payroll expenditures, the following cost of salaries charged to the program were incurred prior to the funding period stipulated in the grant awards:
Cause: The College lacks adequate internal controls over compliance with applicable federal regulations relating to period of performance.
Effect: The College is in noncompliance with applicable period of performance requirements. Accordingly, questioned costs of $2,107 result because the projected questioned costs exceed the $25,000 threshold. For item # 1, only $307 is included in the total questioned costs, which relates to costs incurred prior to the funding period stipulated in the grant awards.
Recommendation: College management should improve internal control policies and strengthen controls to comply with applicable period of performance requirements. Specifically, review should be made to ensure all costs charged to the program are within the funding period stipulated in the grant awards.
Views of Auditee and Corrective Action Plan: The College partially agrees with the finding and provides details in its Corrective Action Plan.