Finding Text
Finding 2022-007: Unallowable Costs / Cash Management
Criteria: As stated in 2 CFR 200.303, the non-Federal entity (i.e. the Organization) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition: Astraea charged unallowed overhead costs to a Federal grant. These unallowable expenses were charged to the Federal government and cash was collected by Astraea.
Cause: Astraea did not have a procedure in place to ensure all expenses charged to the Federal grants were allowable.
Context: During the audit, we noted Astaea's internal control processes were not effective, evidenced by the recording and billing of unallowable overhead costs.
Effect: Unallowable costs were billed to the Federal Government.
Questioned Costs: None noted. These unallowable costs were moved to refundable advance.
Identification as a Repeat Finding: No
Recommendation: We recommend Astraea develop a more stringent internal control process surrounding the review and approval process for expenses recorded to Federal projects.