Finding Text
2023-002 (2022-002) – Allocation Percentage Charged – Significant Deficiency in Internal Controls over Compliance
ALN: 84.126
Federal Award Title: Rehabilitation Services Vocational Rehabilitation Grants to States
Federal Agency: United States Department of Education
Pass-Through Entity: Texas Health and Human Services Commission
Award Number(s): HHS000186000005, HHS000202900008
Federal Award Year: 2023
Condition: The Organization allocated nonpayroll costs between grants using an incorrect calculation in 2 out of 40 items tested.
Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entities is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
According to 2 CFR 200.405(a)(2), costs allocated to a Federal award must be distributed in proportions that may be approximated using reasonable methods.
Effect: The Organization may unintentionally under/over charge expenses to the grant which could lead to questioned costs and repayment of funds to the grantor agency.
Cause: The Organization does not have proper controls in place to verify the approved allocation % is charged on expenses.
Questioned Costs: Known questioned costs of $27 and likely questioned costs of $939.