Finding 618699 (2022-002)

Federal Agency: U.S. Department of Labor Federal Program: Disability Employment Policy Development Federal Award Number: 17.720 Federal Award Year: July 1, 2021 through June 30, 2022; July 1, 2022 through June 30, 2023 Compliance Requirement Allowable Costs (B), Cash Management (C) Criteria or Requirement Per Title 2, U.S. Code of Federal Regulations Part 200 (2 CRF 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award, (Subpart D, Section 200.303), the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Costs must be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E. Program costs must be paid by non-federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)) (i.e., the non-federal entity must disburse funds for program purposes before requesting payment from the federal awarding agency or pass-through entity). Condition Found, Including Perspective For 3 out of 40 payroll samples tested, an internet stipend was charged twice to the program. The amount of the overcharge to the program was $120 and the total sampled payroll population was $98,294. For 1 out of 40 other than payroll samples, compensation for a training session was charged to the program that was not incurred by the entity. The amount of the overcharge to the program was $100 and the total other than payroll sampled population was $188,437. Cause and Possible Asserted Effect Controls were not operating effectively to detect and correct charges to the program that were duplicated or not incurred by the entity. Questioned Costs Questioned costs totaled $220. Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. Identification of whether the audit finding is a repeat of a finding in the immediately prior audit and if so, the applicable prior year finding number The audit finding is not a repeat finding. Recommendations We recommend that the Company enhance their internal control process to ensure the appropriateness of the expenses charged to the program. Views of Responsible Officials Management agrees with the findings and will implement a more detailed review process of the invoicing prior to submission. This review process will include a review of the expenditures being requested for reimbursement with no materiality threshold.