Finding 950904 (2023-002)

Federal Agency: United States Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds AL Number: 21.027 Significant Deficiency in Internal Control over Compliance - Allowable Costs Finding 2023-002 Finding – Federal Award Federal Agency: United States Department of the Treasury Federal Program: Coronavirus State and Local Fiscal Recovery Funds AL Number: 21.027 Type: Significant Deficiency in Internal Control over Compliance - Allowable Costs. Criteria/Requirement: Costs attributable to common or joint use of facilities or services by Treasury programs and other programs must be fairly allocated among the various programs that utilize such services (42 USC 9839(c)). Condition: Appropriate supporting documentation was not maintained to support expenditures allocated to federal programs when the allocation was changed subsequent to the original journal entry. We identified 2 of the 25 expenditures tested in our statistically valid sample that did not agree with the documented cost allocation plan. Upon inquiry, management noted that the allocation had to be corrected in a subsequent entry, but documentation of the approved change was not maintained. Context: Expenditures should be charged to the proper programs and allocated in accordance with the cost allocation plan and documentation of approval of any subsequent change to the allocation plan should be maintained. Cause: Lack of oversight of the cost allocation processes and procedures within the Organization resulted in no documentation of approval for costs allocated between programs. Effect: Grant expenses charged to programs were not supported by documentation of approval. Questioned Costs: None. Recommendation: We recommend management implement procedures to ensure that costs charged to the grant follow the approved cost allocation and documentation of approved changes to allocations be maintained. Views of responsible official: Management concurs with the auditors’ finding and will enhance documentation protocols, standardize the approval process, and have regular reviewing and monitoring.