Finding Text
Criteria: Federal regulations 2 CFR Part 200, Sect 200.403-200.476 defines the rules for allowable costs for federal programs. The costs must be reasonable and necessary and include supporting documenatation for all expenditures including invoices, receipts and purchase orders. Condition: The Alliance had missing or incomplete documentation for costs assigned to the grant in addition to ineligible expenses and did not allocate indirect costs directly within the general ledger. Cause:Management's internal controls over expenses did not specifically address proper documentation and recording of expenses. Effect: As a result of not having proper documentation, the determination of whether or or not a cost is properly charged to a grant cannot be determined. Requests for reimbursements of grant funds are not prepared to accurately report direct and indirect costs. Additionally, sales taxes paid and costs outside ot the grant period are unallowable costs. Questioned Costs: None. Recommendation: We recommend that managemet adopt procedures that require complete documenation for all amounts expended, which includes all credit card charges. Amounts that are to be charged to the federal grant program should be reviewed to determine whether the cost is first, allowed, and if allowed, whether the cost is a direct or indirect cost. Direct and indirect costs should be properly allocated and recorded in the general ledger. Additionally, employees responsible for charging costs to the federal program should receive training in determining allowable and unallowable costs. Views of Responsible Officials: Management agrees with the finding and recommendation. See the attached Corrective Action Plan.