Finding Text
Finding No. 2022-003: Period of Performance ? Material Weakness in Internal Control over Compliance; U.S. Department of Transportation; Research and Development Cluster: PHMSA Pipeline Safety Research and Development; ALN #20.723; Various federal awards (see Schedule of Expenditures of Federal Awards) Criteria Uniform Guidance prescribes to be eligible for federal funding, expenditures must be expended in the period of performance identified by the federal awarding agency. Condition For multiple federal awards, PRCI incurred and reported expenditures outside of the period of performance as identified in the original award agreements. We were unable to obtain appropriate evidence related to modifying the related periods of performance to allow for these expenditures to be recorded outside of the identified period of performance. Context PRCI management was not in compliance with the period of performance requirements. There were six federal award contracts during the year ended December 31, 2022 where amounts were incurred after the period of performance for these awards had ended. The amounts incurred outside of the period of performance included $117,328 of federal award expenditures and $58,334 of cost share requirement. Cause According to PRCI management, employee turnover and inadequate procedures resulted in lack of documentation supporting compliance with the period of performance requirements. Additionally, for certain contracts, the structure over the deliverables in the federal awards are such that some deliverables, which triggers the fixed fee draw allowed in the contracts, were originally scheduled outside of the period of performance without the appropriate documentation to extend the related period of performance. Effect Noncompliance with the period of performance requirement could result in the federal awarding agency imposing conditions or taking corrective actions, including additional requirements or withholding/terminating funds. Questioned Costs $117,328 Recommendation PRCI management should develop and implement procedures and modify accounting structures to ensure compliance with period of performance requirements. Views of Responsible Officials and Planned Corrective Actions See Corrective Action Plan