FAC Explorer

Finding 59444 (2022-001)

Significant Deficiency
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2023-09-26
Audit: 55915
Organization: Arukah Institute of Healing, Inc. (IL)
Auditor: Wipfli LLP

AI Summary

  • Core Issue: Arukah did not apply the 10% de minimis indirect cost rate consistently across all grants as required.
  • Impacted Requirements: Compliance with Uniform Guidance (45 CFR Part 75.414(f)) mandates consistent application of the chosen indirect cost rate.
  • Recommended Follow-Up: Arukah should implement procedures to ensure proper application of the de minimis rate for all grants.

Finding Text

Finding 2022-001 - Cost Allocation Department of Health and Human Services AL # 93.829 AL Number Grant Number Grant Period 93.829 H79SM083202 02/15/2021 - 02/14/2023 Questioned Costs: $0 How were questioned costs computed: N/A Condition: Arukah has elected to use the 10 percent de minimis indirect cost rate as allowed under Uniform Guidance. During the year ended December 31, 2022, Arukah did not appropriately apply the rate to all grants. Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards (45 CFR Part 75.414(f) states that if chosen, this methodology once elected must be used consistently for all Federal awards. Cause: Arukah did not perform a true up of the 10 percent de minimis calculation as of December 31, 2022. Effect: Because of the above condition, Arukah was not in compliance this compliance requirement and a significant deficiency in internal control over compliance exists. Recommendation: We recommend Arukah establish procedures to properly apply to 10 percent de minimis indirect cost rate to all grants. View of Responsible Officials: We agree with the recommendation and have begun implementing additional procedures.

Corrective Action Plan

The root cause of the above finding involved the misunderstanding by fiscal personnel that the entire 10% de minim is of each grant must be expended by the close of the fiscal year even though the grant period did not align with the organization's fiscal year. Arukah concluded that since the grant period was still in process, Arukah had until the end of the grant period to charge precisely 10%. Arukah recognizes after this assessment that this is not in total compliance. Arukah's proposed corrective action plan is to have the CFO include in the procedure a tracking system to ensure cost allocation of exactly 10% de minimis of modified total direct costs at quarterly intervals of the fiscal year. Preventative actions include assessing the application of 10 percent de minimis indirect cost rate to all grants at each month's close as part of our checklist. This process will begin from October 2023 and will be completed by the agency's CFO and reviewed by the agency's CEO.

Categories

Allowable Costs / Cost Principles Significant Deficiency

Other Findings in this Audit

  • 635886 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services $934,398
93.958 Block Grants for Community Mental Health Services $467,286
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $452,660
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds $159,928
93.276 Drug-Free Communities Support Program Grants $117,047
93.959 Block Grants for Prevention and Treatment of Substance Abuse $100,591
93.696 Certified Community Behavioral Health Clinics $39,940