Finding Text
Finding 2021-003: Material Weakness and Questioned Cost – Grant Claim Support
Federal grantor: Department of Commerce
Condition: The Chamber’s expenditure detail for the grant funded projects do not support the amounts
billed to the Department of Commerce. The amounts billed were more than the general ledger detail
supported.
Criteria: A reconciliation of grant project expenses to the grant revenue billed should be performed. The
supporting documentation of any reconciling items should be maintained with the grant bills. Also, 2
CFR 200.400 states that accounting practices of the entity be consistent with cost principals required under
the CFR and support the accumulation of costs and provide adequate documentation to support costs
charged to the Federal award.
Cause: The Chamber billed costs to the grant that were not allocated in the accounting system to that
grant and a reconciliation was not performed comparing the grant billings to the expense detail.
Effect: The expenses billed to the grant may not be correct. Our reconciliation of these expenses
disclosed an overbilling to the grant of approximately $2,500.
Recommendation: The Chamber needs to ensure that expenses to be reimbursed by federal grant funds
are recorded in the class code in the accounting system for that grant so that federal grant revenue in the
accounting system match the expenses allocated to that grant. The Chamber needs to include in their
year-end reconciliations a comparison of grant revenue and expense and ensure they match or can be
reconciled.
Management’s Response: Management’s response to the finding is discussed in the Corrective Action
Plan.