Finding Text
U.S. Department of Public Health
and Human Services
Child Care and Development Block Grant (CCDBG)
ALN: 93.575
Criteria: In the CCDBG Innovation grant contract it states: The Contractor [Florence Crittenton] may not seek compensation from monies payable through this contract for the cost of goods and services that may be or are reimbursed, in whole or in part, from other programs and sources.
Condition: The auditee reported the same payroll costs in this grant as well as in two stabilization grants.
Context: The stabilization grants outline that Florence Crittenton will maintain records and submit quarterly expense reports detailing how funds are allocated (used and/or spent). Employee bonuses were counted as eligible costs for reimbursement in the innovation CCDBG grant totaling $3,700. Additionally, the innovation grant allows for a 5 percent indirect cost counted against direct costs for the month. Therefore, another $185 was counted as eligible based on the bonus amount. One employee’s salaries were counted as eligible costs in the innovation grant, totaling $9,529. The bonus and salary costs were also included in the quarterly expense reports for the stabilization grants.
Effect: Non-compliance with the innovation Child Care and Development Block Grant contract.
Questioned Costs: No questioned costs were identified.
Cause: Florence Crittenton reported employee bonuses and a portion of employee salaries as eligible costs for two separate contracts.
Recommendation: We recommend the organization improve on tracking which federal program funds pay for costs of the organization, in order to prevent duplicate reporting from occurring in the future.
Organization Response: FCFS disagrees with the inclusion of this finding. In both the Condition and the Effect of this finding, the Stabilization block grant is referenced as support for the finding. However, per the auditor’s expertise, this grant should not be listed as federal funds and should not be used as supporting documentation for a finding on the SEFA. In addition, the Stabilization block grant required agencies to report all programmatic expenditures funded even though only a fraction of those expenditures were reimbursed. The Innovation grant that is noted in the Context of finding 2023-002, covers 25% of the CEC director’s salary, leaving 75% of her wage to be paid for by other means. Even if the Stabilization funds were included on the SEFA (which would not be the case due to FCFS being a contractor to the state on the grant), Stabilization funds could still cover up to 75% of the director’s salary and not be considered double reporting. The Stabilization grant was part of ARPA funding by the state to help organizations regain their footing post Covid. The regulations on expenditure were extremely vague and ill-defined, and reporting requirements were almost nonexistent until much later in the granting period. Only after two payments had been received did the reporting requirements come out. Reporting required FCFS to report all expenditures in the program during the previous grant periods.