Finding Text
Federal Agency: Department of the Treasury and Department of Health and Human Services
Federal Program Name:
• Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse
Assistance Listing Number:
• 21.027 and 93.959
Federal Award Identification Number: SLFRP0126
Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services
Pass-Through Number(s): N/A
Award Period: 7/1/2022 – 6/30/2023
Type of Finding:
• Significant Deficiency in Internal Control over Compliance and Other Matters
Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, the non-Federal 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. 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:
93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543.
21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699.
Questioned costs: $25,242.
Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period.
Effect: Noncompliance with federal regulations.
Repeat Finding: Yes: 2022-002
Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date.
Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.