Finding Text
2022-002: Unallowable Costs, ALN 93.053 Nutrition Services Incentive Program, Allowable Costs Condition: Administrative expenditures were improperly classified as expenditures funded by the Nutrition Services Incentive Program (NSIP). Criteria: NSIP funds may only be used to purchase domestic foods as outlined under Title 7 U.S. Code of Federal Regulations Part 250.68, Nutrition Services Incentive Program. Grant funding received through NSIP may not be used to pay for administration or other services. Cause: Unallowable costs were improperly classified to the financial records supporting NSIP expenditures and allowable costs were improperly allocated to other projects. Effect: Financial records supporting costs expensed under the NSIP award do not reflect the nature of the expenditures requested for reimbursement. Expenditures were misclassified within the financial records to improper programs and thus are considered a questioned cost. Perspective Information: Noted in one out of a sample of twenty-five expenditures charged to the Aging Cluster. Two of the items in the sample were expenditures charged to NSIP. We reviewed the list of the remaining expenditures charged to NSIP and confirmed the sample was representative of the entire population. Recommendation: It is critical for the underlying financial records to support an organization?s claims for costs reimbursements under federal award programs with adequate documentation. Staff must allocate costs appropriately for allowable costs under each federal program and ensure expenditures charged to the federal programs are for appropriate purposes and are properly classified in the records to avoid noncompliance with federal regulations and program requirements. Views of Responsible Officials and Planned Corrective Action: Management partially agrees with the finding. We agree that certain amounts were misapplied to the NSIP account. However, the funds did purchase food as required by the grant. We believe this to be a reporting error and not a misuse of grant funds. With the vacant position recently filled, we have added additional review procedures to prevent any reoccurrence of misapplication.