Finding Text
Criteria: The Uniform Guidance administrative requirements and cost principles apply to federal funding awarded on or after December 26, 2014. 2 CFR 200, Subpart E – Cost Principles Section 200.403(a) states that costs must be necessary and reasonable for the performance of the federal award and be allocable thereto under cost principles.
Condition: The City requested and received reimbursement from Federal Emergency Management Agency (FEMA) in the amount of $68,728, of which $36,438 (or 884 hours) related to force equipment and $32,290 (or 1,061 overtime manhours) related to force labor. Out of a population of 884 force equipment hours, or $36,438, 350 hours were tested. Of the tested amount, 298 hours, or $12,236, lacked equipment hours logs. Out of a population of 1,061 overtime manhours, or $32,290, spread across 27 employees, we tested 388 overtime manhours, or $9,648, spread across 5 employees. Of the tested amount, there were discrepancies in rates charged for the employees, as well as hour classification between overtime and straight time. Additionally, the time sheet for one employee was for a different period than the period in which reimbursement was requested. This accounted for 96 of the tested hours. When analyzing differences in costs requested, of the total $9,648 tested it was found that $1,782, or 18.5%, was over requested. When projected to the population, it results in a request that is approximately $6,000 too high.
Cause: The City does not have policies and procedures in place to ensure compliance with federal cost requirements regarding the allowability of reimbursed costs.
Questioned Costs: $18,201
Effect: The City may be in noncompliance with the Uniform Guidance Allowable Costs standards.
Recommendation: The City should implement policies and procedures that ensure an effective review of reimbursement requests prior to submission to ensure all costs requested are legitimate and allowable.
Identification of a repeat finding: This is a new finding in the current year.
View of Responsible Official: Management concurs with the finding.