Finding Text
Criteria: ALN 21.019, Department of the Treasury clarified that for a cost to be considered to have been incurred, performance or delivery must occur during the covered period but payment of funds need not be made during that time (though it is generally expected that this will take place within 90 days of a cost being incurred). The CARES Act provides that payments from the Fund may only be used to cover costs that were incurred during the period that begins on March 1, 2020 and ends on December 31, 2021 (the “covered period”). Condition: The Organization received an influx of CARES Act funds in August 2020 from various sources during the COVID pandemic which had to be used by November 30, 2020. Due to the short time frame of the award, the Organization was focused on spending the funds to ensure compliance with the pandemic measures. During our audit, we noted one instance in which the expenditures were claimed for goods that were paid but not received until after the covered period. As of July 31, 2021, the vendor credit balance was approximately $50,000. As of December 31, 2021, there was still a vendor credit balance of $19,706. Cause: The Organization was informed by the grantor that expenditures had to be incurred in order to be claimed. However, the Organization was not aware that credits for unfulfilled orders were to be credited back to ALN 21.019 and are considered ineligible due to being claimed outside of the covered period. There appeared to be a lack of knowledge of the compliance requirements as it relates to this new federal program or a misunderstanding of the compliance requirements. Effect: Personnel were not knowledgeable on this new ALN 21.019 program requirements. Context: Of the sixty (60) non-payroll samples selected for testing, there was one (1) instance in which the cost claimed for supplies was for the original order versus the partially filled order. Known questioned cost is $19,706. The monetary error rate was used to project likely questioned costs of $49,826.