Finding 525519 (2024-002)

U.S. Department of State Professional & Cultural Exchange Programs Assistance Listing #19.415 Finding 2024-002 (Repeated 2023-003) Nonmaterial Noncompliance – Allowable Costs/Activities Criteria: The A-102 Common Rule requires that non-Federal entities receiving Federal awards establish and maintain internal control designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Adequate segregation of duties provided between performance, review, and recordkeeping of a task is a control activity which will reasonably ensure compliance with Federal laws, regulations, and program requirements. Condition: Management approval could not be readily substantiated for the allocation percentages applied to one employee out of 14 selected for testing. Questioned Costs: None. Effect: By not maintaining adequate and consistent documentation of review and approval of the allocation of employee payroll expense, the Organization may not be able to readily prevent, detect, and correct potential errors in allowable costs/activities. Therefore, the Organization may be incorrectly reimbursed for expenditures under the program requirements. Cause: Current processes do not include maintaining adequate documentation to support review and approval of all personnel expenses charged to the federal program. Recommendation: The Organization should improve policies and procedures to ensure personnel expenses are adequately supported by documentation evidencing the review and approval of personnel expenses charged to the federal program. Management’s Response: See Corrective Action Plan.