Finding Text
Condition: During our audit of federal award expenditures for the fiscal year ended December 31, 2024, we identified certain instances where costs incurred in prior periods were improperly charged to the current year's federal awards.
Criteria: 2 CFR 200.403(g) requires that costs must be "determined in accordance with generally accepted accounting principles (“GAAP”).” Additionally, 2 CFR 200.309 states that "a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance."
Cause: Management indicated that year-end processing procedures did not adequately identify and properly allocate expenses to the appropriate period.
Effect: Improper period allocation of costs resulted in inaccurate financial reporting of federal award expenditures and potential violation of period of performance requirements.
Repeat Finding: No
Recommendation: It is recommended that management implement enhanced review procedures for period-end expenses to ensure a proper cutoff, develop a monitoring system to track expenses by period of performance, and a establish a forma process for review and approval of payments made near the end of a reporting period.
Views of responsible officials: Management of the Organization concurs with the finding and has implemented a corrective action plan to address the identified deficiency.