Finding Text
Finding Type: Material Noncompliance/Material Weakness in Internal Control over Compliance
Programs: Federal Transit Cluster; Federal Transit-Formula Grant, and Bus Facilities Formula Grant Programs; U.S. Department of Transportation; Assistance Listing Number 20.500, 20.507, 20.525, 20.526.
Condition: The Authority drew down federal funds before incurring eligible expenditures.
Criteria: Federal awards must be drawn on a reimbursement basis in accordance with Uniform Guidance requirements.
Cause: The Authority anticipated future amendments to contracts that would retroactively make current expenditures eligible. However, the draws in question were made before these amendments were finalized.
Effect: As a result, the Authority did not fully comply with the Uniform Guidance requirements applicable to the referenced grants.
Questioned Costs: A total of $1,120,000 was drawn prior to the effective date of the grant amendments.
Recommendation: We recommend that the Authority ensure that all expenditures are incurred and eligible prior to requesting reimbursement from federal funds.
View of Responsible Officials: We agree with the recommendation and have already implemented procedures to ensure all expenditures are incurred and eligible prior to requesting reimbursement from federal funds.