Finding 571966 (2024-005)

Significant Deficiency Repeat Finding
Requirement
H
Questioned Costs
$1
Year
2024
Accepted
2025-07-25
Audit: 363060
Auditor: Bdo

AI Summary

  • Core Issue: Expenses totaling $397 were incurred outside the award's period of performance, violating federal compliance requirements.
  • Impacted Requirements: Non-Federal entities must only charge allowable costs incurred during the specified period, with obligations liquidated within 120 days post-award.
  • Recommended Follow-Up: Revise internal procedures to better detect out-of-period expenses and consider closing projects in the accounting system to manage costs incurred after the performance period.

Finding Text

Internal Controls over Compliance and Compliance with the Period of Performance Compliance Requirement See Schedule of Findings and Questioned Costs for chart/table. Criteria or Specific Requirement: In accordance with §200.309, a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all obligations incurred under the Federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award as required by §200.344(b). When used in connection with a non-Federal entity’s utilization of funds under a Federal award, “obligations” means orders placed for property, services, contracts, and subawards made, and similar transactions during a given period that require payment by the non-Federal entity during the same or a future period as described in §200.71. Condition: We identified two instances out of 25 sample items selected, whereby expenses were incurred outside of the award period of performance. These expenses totaled $298 for award AID- 654-A-17-00003 and $99 for award 72069523CA00002. Questioned Costs: We identified $397 in known questioned costs as a result of our sampling and testing procedures related to the close-out period of the award. Context: BDO’s testing of the period of performance compliance requirement was performed by examining whether the expenses selected as part of our testing of allowable costs and allowable activities were incurred within the proper period of performance of the award. BDO also performed specific period of performance procedures on those awards that began or ended during 2024. A total of 25 samples were selected across the awards that began or ended during 2024. As a result of that testing two compliance matters were identiifed. Cause: PSI management has procedures in place to review expenditures to determine the appropriate period of performance; however, those procedures were not performed to a level of detail to identify expenses that were incurred outside the period of the award. Effect: The lack of adherence to the established internal control procedures around the period of performance of the award resulted in noncompliance and questioned costs that need to be returned to the U.S. Agency for International Development. Continued noncompliance with federal statutes, regulations, and the provisions of the award agreements could ultimately result in additional disallowed costs for the major program. Repeat Finding: This finding is a repeat finding and was reported as finding 2023-005 in the 2023 schedule of findings and questioned costs. Recommendation: We recommend management revisit and consider revising their internal procedures around detecting expenditures incurred outside of the period of performance in order to prevent the charging of costs outside of the period of performance of the award. Furthermore, we believe an option would be to close the project within the accounting system, and create a separate project to accumulate any costs incurred after the end of the period of performance. The costs incurred subsequent to the end of the period of performance should go through the review and approval of individuals at PSI Headquarters. Views of Responsible Officials: PSI management agrees with the finding and recommendations set forth within and will provide training to appropriate staff responsible for monitoring expenses on the program. Refer to management’s corrective action plan for additional information.

Corrective Action Plan

Internal Controls over Compliance and Compliance with the Period of Performance Compliance Requirement     Contact: Chad Bender  Title: Controller  Phone Number: 202-785-0072  Estimated Completion Date – done  Corrective Action  The results of the 2024 audit will be shared with appropriate staff and reiterated in training to ensure that adequate attention and guidance is provided on the allowability of trailing costs and the unallowability of newly incurred costs. PSI delivers in person training to its global finance and program staff and will continue to offer training during 2025 to address such issues.

Categories

Questioned Costs Subrecipient Monitoring Period of Performance

Other Findings in this Audit

  • 571964 2024-003
    Significant Deficiency Repeat
  • 571965 2024-004
    Significant Deficiency Repeat
  • 571967 2024-004
    Significant Deficiency Repeat
  • 571968 2024-003
    Significant Deficiency Repeat
  • 571969 2024-002
    Significant Deficiency
  • 571970 2024-001
    Significant Deficiency Repeat
  • 571971 2024-004
    Significant Deficiency Repeat
  • 571972 2024-004
    Significant Deficiency Repeat
  • 571973 2024-004
    Significant Deficiency Repeat
  • 571974 2024-005
    Significant Deficiency Repeat
  • 571975 2024-004
    Significant Deficiency Repeat
  • 571976 2024-002
    Significant Deficiency
  • 571977 2024-004
    Significant Deficiency Repeat
  • 1148406 2024-003
    Significant Deficiency Repeat
  • 1148407 2024-004
    Significant Deficiency Repeat
  • 1148408 2024-005
    Significant Deficiency Repeat
  • 1148409 2024-004
    Significant Deficiency Repeat
  • 1148410 2024-003
    Significant Deficiency Repeat
  • 1148411 2024-002
    Significant Deficiency
  • 1148412 2024-001
    Significant Deficiency Repeat
  • 1148413 2024-004
    Significant Deficiency Repeat
  • 1148414 2024-004
    Significant Deficiency Repeat
  • 1148415 2024-004
    Significant Deficiency Repeat
  • 1148416 2024-005
    Significant Deficiency Repeat
  • 1148417 2024-004
    Significant Deficiency Repeat
  • 1148418 2024-002
    Significant Deficiency
  • 1148419 2024-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
98.001 Usaid Foreign Assistance for Programs Overseas $15.54M
98.U00 Usaid Cost Reimbursable Contracts and Other Awards $699,472
98.001 Covid 19 - Usaid Foreign Assistance for Programs Overseas $344,479
98.U00 Covid 19 - Usaid Cost Reimbursable Contracts and Other Awards $186,371
12.420 Military Medical Research and Development $73,012
12.350 Department of Defense Hiv/aids Prevention Program $35,605
93.067 Global Aids $-1,305