Finding Text
Material Weakness – Documentation of Non-Payroll Expenditures – Allowable Costs /Activities
U.S. Department of Health and Human Services CFDA #93.566
U.S. Department of Labor CFDA #17.258 / 17.259 / 17.278
Criteria: In accordance with Uniform Guidance, all federal grant expenditures must be adequately documented. The Organization should have internal controls designed to ensure proper cost allocation.
Condition: The Organization did not maintain sufficient documentation to support the internal approval and proper distribution of expenditures submitted for reimbursement.
Cause: This situation was attributed to the turnover and vacancy in the accounting department positions from July 2021 through May 2022 which resulted in the absence of guidance as well as the use of inconsistent accounting methodologies during this period and at year end.
Effect: There is a risk that unallowable costs could be charged to a grant or conversely there is a risk that allowable costs were not charged to the grant.
Questioned costs: Unknown
Repeat finding: No
Recommendation: We recommend the Organization implement procedures to ensure sufficient supporting records are maintained for all grant expenses submitted for reimbursement.
Response: The Organization agrees with the finding. There were gaps in information flow due to staff turnover. The Organization already has a process in place for reviewing expenditures. The Organization will significantly increase the practice of including sufficient supporting records to report grant expenses for reimbursement.