Finding 957617 (2023-002)

Finding 2023-002 Significant deficiency in internal controls over compliance related to allowable costs and period of performance. Federal Agency: U.S. Department of Commerce Program Title: Pacific Fisheries Data Program Assistance Listing Number: 11.437 Award Numbers: NOAA-NMFS-AK-2023-2007663 Award Period: October 1, 2022 to September 30, 2027 Criteria 2 U.S. CFR Part 200.403, 404, and 405 of Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require that costs must be necessary and reasonable for the performance of the Federal Award, that costs be determined in accordance with GAAP, and that costs be adequately documented including the allocation of those costs. Condition/Context for Evaluation IPHC’s internal controls over non-payroll charges to the Federal Award did not include review for allowability, accrual in the proper period, or that adequate documentation existed to support the amounts charged or allocated. Three out of 25 non-payroll disbursements tested did not include evidence supporting one or more of these controls. Questioned Costs $2,674 Cause IPHC’s operation of internal controls were not sufficient to ensure allowable costs were charged in accordance with 2 U.S. CFR Part 200.403, 404, and 405 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Effect or Potential Effect As a result, charges were made to Federal awards that were not allowable or allocable to the award. Repeat Finding Not applicable. Recommendation We recommend that IPHC ensure internal controls include reviewing costs charged to the Federal Award for conformity with 2 U.S. CFR Part 200.403, 404, and 405 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards for allowability, allocability, and reasonableness. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying corrective action plan.