Finding Text
Federal Program Information
Funding Agency: U.S. Department of Treasury
Federal ALN: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds
Pass Through Agency: Tennessee Arts Commission
Criteria
The Uniform Guidance contains cost principles which establish guidelines for allowable charges to federal grants. According to section 2 CFR 200.425, only audit services required by, and performed in accordance with, the Single Audit Act are allowed to be charged to federal grants.
Condition
Out of a sample of 25 charges to the grant that were tested, 1 of the charges was unallowed. The charge was determined to be unallowed as it was for the 2022 audit, the majority of which was not required by the Single Audit Act.
Cause
The Organization has only in recent years began to receive federal funding and therefore did not have a clear understanding of the cost principles contained in the Uniform Guidance.
Effect
Improper charges, in addition to those identified above, could be submitted to grantors for reimbursement.
Questioned Costs
$35,125
Auditor’s Recommendation
TPAC should ensure that charges to federal grants are allowable in accordance with cost principles contained in Uniform Guidance. Additional training should be obtained to gain a further understanding of these requirements.
Management Response
Management agrees with finding. TPAC Grants contacted the pass-through agency to offer a solution, to replace the unallowable expense with an allowable expense. The Organization will also have TPAC Grants as well as TPAC Finance take training on Uniform Guidance to gain a better understanding NEW Dof these requirements in the future.