FAC Explorer

Finding 525564 (2024-002)

Significant Deficiency
Requirement
B
Questioned Costs
$1
Year
2024
Accepted
2025-03-04
Audit: 344645
Organization: North Central Michigan College (MI)
Auditor: Rehmann Robson LLC

AI Summary

  • Core Issue: The College overcharged the grant by $21,765 due to using an incorrect rate for indirect costs.
  • Impacted Requirements: The College failed to apply the de minimis rate of 10% and did not use the correct modified total direct costs (MTDC) for calculations.
  • Recommended Follow-Up: Implement a review process to ensure compliance with the grant award letter regarding indirect costs.

Finding Text

Finding Type. Immaterial Noncompliance/Significant Deficiency in Internal Control over Compliance (Allowable Costs/Cost Principles). Program. Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Assistance Listing Number 21.027; Award Number SLFRP0127. Criteria. Any non-Federal entity that does not have a current negotiated rate may elect to charge a de minimis rate of 10% of modified total direct costs ("MTDC"). Condition. The College does not have a negotiated rate, however, they used a rate other than the de minimis rate of 10% in their calculation of indirect costs. The College also did not use the MTDC for purposes of this calculation, but instead used the budgeted indirect cost total for the program. Cause. The College does not have a review process in place to ensure indirect costs charged to the grant are in accordance with the grant award letter. Effect. As a result of this condition, the College over-charged the grant by $21,765 during 2024. Questioned Costs. Questioned costs totaled $21,765 as a result of this finding. Recommendation. We recommend that the College implement a review process to ensure that the indirect costs charged to the grant are in accordance with the grant award letter. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.

Corrective Action Plan

Auditor Description of Condition and Effect. The College does not have a negotiated rate, however, they used a rate other than the de minimis rate of 10% in their calculation of indirect costs. The College also did not use the modified total direct costs “MTDC” for purposes of this calculation, but instead used the budgeted indirect cost total for the program. As a result of this condition, the College over-charged the grant by $21,765 during the fiscal year ended June 30, 2024. Auditor Recommendation. We recommend that the College implement a review process to ensure that the indirect costs charged to the grant are in accordance with the grant award letter. Corrective Action. The College will implement a review process to ensure that the indirect costs charged to the grant are in accordance with the grant award letter. Responsible Persons. Tom Zeidel, Vice President of Finance and Facilities and Troy Slater, Director of Business Office. Anticipated Completion Date. March 31, 2025.

Categories

Questioned Costs Allowable Costs / Cost Principles Significant Deficiency Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 525565 2024-002
    Significant Deficiency
  • 525566 2024-002
    Significant Deficiency
  • 525567 2024-002
    Significant Deficiency
  • 1102006 2024-002
    Significant Deficiency
  • 1102007 2024-002
    Significant Deficiency
  • 1102008 2024-002
    Significant Deficiency
  • 1102009 2024-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.063 Federal Pell Grant Program $2.27M
83.335 Childcare Access Means Parents in Schools $113,460
84.007 Federal Supplemental Educational Opportunity Grants $58,888
84.033 Federal Work-Study Program $52,008
21.027 Coronavirus State and Local Fiscal Recovery Funds $45,262
84.268 Federal Direct Student Loans $36,498
84.048 Career and Technical Education -- Basic Grants to States $9,200