Finding Text
2020-003 – Period of Performance
Significant Deficiency in Internal Controls Over Compliance and Instances of Noncompliance
Assistance Listing Number: 59.046
Federal Agency/Pass-through Entity - Program Name: Small Business Administration - Microloan Program
Award Number(s): SBAOCAML200065-01-00
Award Year(s): 2020
Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods."
Condition: The Organization allocated three expenditures to Grant Award #SBA OCAML200065-01-00, which were outside the grant's period of performance.
Questioned costs: $177
Context: During our audit procedures, we tested the entire population of costs associated with Award #SBAOCAML200065-01-00 and noted three rent payments were charged to the grant totaling $177 that were for months prior to the 07/01/2020-06/30/2021 period of performance.
Cause: The Organization did not have internal controls in place to ensure funds were allocated to the correct grant's period of performance.
Effect or potential effect: The Organization is out of compliance with Award #SBA OCAML200065-01-00's period of performance.
Repeat finding: No
Recommendation: The Organization should implement controls to ensure all expenditures allocated to grants are for costs incurred during the specified period of performance.
Views of responsible officials: The Organization agrees with the finding and has implemented controls to ensure all expenditures allocated to grants are for costs incurred during the specified period of performance. For additional information, see the Organization’s separate report for planned corrective actions.