Finding Text
Federal Agency: Department of Justice
Federal Program Name: Services for Victims of Human Trafficking
Assistance Listing Number: 16.320
Federal Award Identification Number and Year: 2020-VT-BX-0080, 2020-VM-BX-0003,
15POVC-21-GG-03694-HT (2021), and 2020-HT-OVC-614
Award Period: October 1, 2020 through September 30, 2024
Type of Finding:
• Material Weakness in Internal Control over Compliance
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of allowable costs. The Organization should have internal controls designed to ensure compliance with those provisions.
Condition: Internal controls over compliance for allowable costs were not in place to support that the Organization was requesting reimbursement for costs allowable by the Federal Agency.
Questioned costs: None as the net impact of the two errors identified below are $0.
Context:
Indirect Allocations
In a sample of 8, 5 drawdown requests were submitted to the Federal Agency at a lower cost rate than the 10 percent de minimis threshold allowed for by the Federal Agency. 1 of the 8 was submitted at a higher rate than the 10 percent de minimis threshold. The net impact of the inconsistency of the rate being applied to each draw within our sample resulted in the Organization charging $2,115 less to the grant than earned.
Cash Disbursements (other than payroll related items)
In a sample of 7, 1 of the items included as an allowable cost was an error. The expense of $2,115 was incurred by the Organization but incorrectly posted in their accounting software. The support of the disbursement received supported that the cost was not allowable per the grant guidelines.
Cause: The Organization was in its startup phases and was struggling to maintain current operations with limited staff.
Effect or potential effect: The amounts reimbursed by the Federal Agency may by unallowable and result in a refund to the Federal Agency.
Repeat Finding: No
Recommendation: We recommend the Organization design controls to ensure the draw down requests and related support are formally reviewed and approved by the Executive Director for allowability before submitting the request to the awarding agency.
Views of responsible officials: We agreed with the above comment. The Organization will put a formal layer of review after preparation of the draw down request and support and before submission to the awarding agency and make sure the approved support is kept on file.