Finding Text
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles
Criteria: Requirements per section 2 CFR Part 200 Subpart E of the Uniform Guidance states that costs charged to federal awards must be determined in accordance with GAAP, be adequately documented, and be allocable to the federal award, and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition: During our testing of 43 disbursements for the year ended June 30, 2022, we noted that there were 22 instances where there was a lack of adequate documentation or the amount allocated to the major program could not be substantiated.
Cause: With personnel changes at most levels within the Organization, documentation from the former employees could not be located and the current employees were unfamiliar with the requirements of the federal awards.
Effect or Potential Effect: Due to the lack of internal controls in this area, support for various expenditures were not able to be located which could lead costs being allocated improperly to the federal grants.
Questioned Costs: $586,229
Context: In our testing sample, approximately 56% of total expenditures tested did not have proper documentation or the allocation to the federal award could not be provided. The potential error was extrapolated to the population leading to questioned costs of $586,229.
Recommendation: We recommend the Organization implement proper internal controls over compliance with allowable cost principles, including maintaining support for allocation methodologies used and costs incurred, and to ensure costs relate to the federal program to which they are charged.
View of Responsible Officials: The Organization concurs with the finding and the related recommendation. The Organization has implemented procedures to improve document retention and support for allocations to the federal grant during the year ending June 30, 2024.