Finding Text
Condition: Violence Free Minnesota included sales tax in award expenditures. This was determined by viewed disbursement records, noting certain invoices where the Organization?s exemption from sales tax was not properly obtained from vendors. There was also an instance of depreciation being charged to the grant. Depreciation was no longer charged to the grant when new accounting staff properly changed the policy. Criteria: The Uniform Guidance allows and disallows certain costs for grant expenditure. Sales tax is not allowed (per 45 CFR 75.470(b)(1)(i)). Depreciation is allowed, but only if the assets depreciated are properly allocated to the grant award (per 45 CFR 75.436(a)). Questioned Costs: Known questioned costs are $184. Context: We tested 40 transactions charged to the grant. We noted 5 transactions charged to the grant that included sales tax. We noted one isolated instance in which depreciation was charged to the grant. Cause: Violence Free Minnesota has been transitioning staff and updating disbursement policies and practices. Prior employees were not aware of requirements. New staff are redesigning and implementing policies to address issues as they arise. Effect: Costs noted in "questioned costs" were charged to the grant that should not have been charged. Recommendation: The Organization and staff understand these findings and have taken appropriate action. We recommend that the staff continue to ensure that unallowable costs are detected before being allocated to grants. Views of Responsible Officials: Due to frequent turnover of administrative, management and accounting staff over the past year and a half, some invoices were charged to the grant with sales tax included. All staff and accountants are now diligently reviewing invoices and also have reached out to all vendors and provided the ST3 to ensure they no longer charge tax.