Finding Text
Criteria:
Per Title 2 CFR § 200.516, the auditor must report known questioned costs greater than $25,000 for a
Federal program that is not audited as a major program.
In addition, Title 2 CFR § 200.303 requires the recipient of federal funds establish and maintain effective
internal control over the federal award that provides reasonable assurance that the non-federal entity is
managing the federal award in compliance with federal statutes, regulations, and the terms and conditions
of the federal award.
Condition:
As part of a review performed by METRO’s internal audit department (METRO IA) over the activities of the
vanpool department in fiscal year 2024, METRO IA identified certain questioned costs incurred and
reimbursed as part of the Highway Planning and Construction program administered by the Texas
Department of Transportation (TXDOT). These questioned costs were communicated by METRO
management to TXDOT and they are working with TXDOT on final resolution. The Highway Planning and
Construction program was not a major program in fiscal year 2024 subject to a single audit.
We did not identify any other similar costs in the major programs tested.
Total questioned cost identified through the METRO IA procedures was $262,794. Total expenditures for the Highway Planning and Construction program were $744,358.
Cause:
The Vanpool department did not have adequate internal controls and processes in place to ensure that
department personnel properly understood grant requirements and that program costs were properly
calculated and allowable in accordance with the grant agreements.
Effect:
Certain of the costs incurred and submitted for reimbursement by METRO were unallowable.
Auditor’s Recommendation:
METRO should establish appropriate processes and controls to guide personnel in the determination of
allowable costs in accordance with grant agreements. In particular, management should focus on the
processes and controls associated with the vanpool department.