Finding Text
Finding 2022-004 Lack of Internal Controls over Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Federal Agency: Office of Naval Research
Federal Program: Office of Naval Research Technology and Innovation Development in Alaska
ALN Number: 12.300
Award Number: N00014-19-1-2030
Award Years: 2022
Type of Finding: Material Weakness over compliance and noncompliance
Criteria: 2 CFR Part 200.403.g states that costs must be adequately documented in order to be allowable under Federal awards.
Condition and Context: There was not an adequate system in place to track the payroll costs charged to this program. The client was unable to provide support for the salary expenses charged to this program, or support for which employees were eligible to be paid from this award, making it impossible to test transactions for allowable costs.
Cause: Lack of internal control over allowable payroll transactions charged to the major program.
Repeat Finding: This is not a repeat finding.
Effect: The lack of supporting documentation allows for the potential for misstatement of expenditures due to employees being incorrectly charged to funding sources for which their payroll is an unallowable cost.
Questioned Costs: The total amount of salary and fringe expenditures charged to the program was $749,570.
Recommendation: We recommend that Launch Alaska begins to maintain documentation for employees eligible to charge to various programs, as well as maintaining documentation for tracking the payroll costs charged to each program.
Management Response: Management concurs with this finding. See Corrective Action Plan.