Finding 573892 (2024-002)

Material Weakness
Requirement
B
Questioned Costs
-
Year
2024
Accepted
2025-08-19

AI Summary

  • Core Issue: The Alliance is not properly allocating indirect costs, as their method does not match actual payroll data.
  • Impacted Requirements: This violates Title 2 U.S. CFR Part 200.414, which mandates appropriate cost allocation.
  • Recommended Follow-Up: Implement a review process for cost allocations and consider using the de minimis cost rate, now at 15%, to simplify compliance.

Finding Text

2024-002: Allocation of Costs Other Than Payroll Criteria or specific requirement: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200.414, the Alliance must allocate indirect costs appropriately. Condition and context: The Alliance allocates certain shared costs, other than payroll, using an approach that details the full-time equivalents performing work on each grant. During the year ended June 30, 2024, costs were allocation using a schedule that did not agree to actual underlying payroll data. Additionally, the schedule that was used was not reviewed by the Executive Director. Cause: The Alliance does not have adequate staffing in place to ensure that the proper allocations were used. Effect or potential effect: Without adequate controls over this process, the Alliance could charge unallowable costs to the HIV Formula Grants. Questioned costs: None. Identification as a repeat finding, if applicable: Not applicable. Recommendation: The Alliance should ensure that internal control processes for the allocation of cost are consistently followed. A review process should be in place to ensure that accurate allocations are used. The Alliance could also consider the use of the de minimis cost rate, which would alleviate the need to create an allocation approach for shared costs. Effective October 1, 2024, the de minimis cost rate increased to 15%. Views of responsible officials: Refer to the Corrective Action Plan prepared by the Alliance in regard to this matter.

Corrective Action Plan

Starting in May 2024, the Alliance adapted its monthly Time and Effort Report that is reviewed by Kim Atkins, Executive Director, to be used for allocation of expenses other than payroll. This ensures a consistent, reviewed and authorized report is being used for expense allocation. This report is shared monthly with the Alliance’s funding agencies along with the submission of monthly vouchers for processing. During the year ended June 30, 2025, the Alliance has ensured that allocations were signed off on by Kim and has significantly reduced the amount of finance staff time required to process the allocation of administrative costs. As of July 1, 2025, the approved staff allocations are being uploaded into ADP in the anticipation of a direct link between ADP and the NetSuite general ledger so that personnel costs will be allocated automatically going forward. As of July 1, 2025 the Alliance is modifying all of its grants to adopt the 15% de minimis cost rate for all expenses other than personnel, direct program, and space costs.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 573893 2024-003
    Significant Deficiency
  • 573894 2024-004
    Significant Deficiency
  • 573895 2024-002
    Material Weakness
  • 573896 2024-003
    Significant Deficiency
  • 573897 2024-004
    Significant Deficiency
  • 573898 2024-002
    Material Weakness
  • 573899 2024-003
    Significant Deficiency
  • 573900 2024-004
    Significant Deficiency
  • 573901 2024-002
    Material Weakness
  • 573902 2024-003
    Significant Deficiency
  • 573903 2024-004
    Significant Deficiency
  • 573904 2024-002
    Material Weakness
  • 573905 2024-003
    Significant Deficiency
  • 573906 2024-004
    Significant Deficiency
  • 1150334 2024-002
    Material Weakness
  • 1150335 2024-003
    Significant Deficiency
  • 1150336 2024-004
    Significant Deficiency
  • 1150337 2024-002
    Material Weakness
  • 1150338 2024-003
    Significant Deficiency
  • 1150339 2024-004
    Significant Deficiency
  • 1150340 2024-002
    Material Weakness
  • 1150341 2024-003
    Significant Deficiency
  • 1150342 2024-004
    Significant Deficiency
  • 1150343 2024-002
    Material Weakness
  • 1150344 2024-003
    Significant Deficiency
  • 1150345 2024-004
    Significant Deficiency
  • 1150346 2024-002
    Material Weakness
  • 1150347 2024-003
    Significant Deficiency
  • 1150348 2024-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $457,755
14.241 Housing Opportunities for Persons with Aids $272,335
14.267 Continuum of Care Program $254,278
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $206,224
93.917 Hiv Care Formula Grants $202,601
93.941 Hiv Demonstration, Research, Public and Professional Education Projects $120,049
93.788 Opioid Str $84,380
93.153 Coordinated Services and Access to Research for Women, Infants, Children, and Youth $35,000