Finding Text
Program Name – Continuum of Care, Special Programs for the Aging, National Family Caregiver Support
CFDA Number – 14.267, 93.041, 93.052
Pass-through Entity – 14.267 – N/A
93.041 – The Seniors Alliance Program
93.052 – The Seniors Alliance Program
Finding Type – Material Weakness and Noncompliance
Criteria – Amounts drawn down from federal grants should be based on actual expenditures incurred. Any costs allocated to the grant should be based on a reasonable and appropriate allocation methodology.
Condition and Description – During our testing of grant drawdowns, we noted certain drawdowns were not correlated with the actual expenses incurred. Additionally, no timely reconciliation was documented to adjust the drawdowns to actual expense. As a result, we noted certain grants were drawn or billed in excess of the expenses incurred. Additionally, for some grants the expenses incurred were either not billed or the expenses incurred exceeded the award amount and could not be reimbursed. Also, certain costs allocated to the grant did not have a documented allocation methodology.
Questioned Costs – 14.267 – $336,260
93.041 – $ 7,869
93.052 – $ 12,655
Identification of a Repeat Finding – This is a repeat finding and was identified as Finding 2020-004 in the prior year single audit.
Cause/Effect – Due to variances in amounts drawn down from grants and documented expenditures, along with an undocumented allocation methodology, for some grants the Organization received more federal funds than the expense incurred and for other grants the Organization was not reimbursed for eligible expenses.
Recommendation – Amounts drawn down should be based on actual expenses incurred. Any differences or adjustments should be reconciled or adjusted as necessary. Additionally, any expense allocations should be documented and based on a reasonable methodology.
View of Responsible Official and Corrective Action Plan – We agree with the auditors' comments, and the following action will be taken to improve the situation. As of the date of this report, we are adjusting the Organization’s Accounting Policies & Procedure Manual to include a detailed review of the General Ledger detail supporting each draw request. The purpose of this change is to request drawdowns that agree with actual expenses incurred during the draw period requested. Due to late completion of the 2020 audit, recommendations cited in the audit report were not implemented in 2021. During 2022, the practice of tracking grant utilization on a monthly basis was instituted for all grant awards. Documentation of allocation methodologies for shared expenses (i.e., office rent, general office supplies, telephone/internet costs, copiers, payroll processing) had begun.
After the 2020 audit report date, all grant draws were supported by the expense detail reflected in the general ledger as prepared by a Sr. Accountant and reviewed and approved by the Chief Financial Officer. Further, monthly reconciliations of grant draw requests and posted revenues, receivables, and expenses will be performed for each grant. The services of an external consultant were utilized to assess the finance department’s staffing levels. This resulted in the onboarding of three (3) new Sr. Accountants and a Chief Financial Officer by early 2022. This provides adequate staffing to perform a review of the federal grant expenditures on a timely basis.