Finding Text
Finding #2023-005 – Material Weakness and Other Noncompliance. Applicable federal program: U. S. Department of Health and Human Services, Passed through U. S. Committee for Refugee and Immigrants, 93.567, Refugee and Entrant Assistance – Matching Grant Program, Contract period and grant #: 10/01/21 – 09/30/23 2202VARVMG. Criteria: Matching, Level of Effort and Earmarking 45 CFR 75 306 stipulates that matching funds must meet the following criteria: 1) verifiable from organization’s records, 2) not included as contributions for any other federal award, 3) are necessary and reasonable for accomplishment of project or program objectives, 4) are allowable under Uniform Guidance Subpart E, 5) are not paid by the federal government under another federal award except where federal statute allows, and 6) are included in approved budget when required by HHS award agency. Additionally, donated goods and services should be valued at fair value, must be documented, and to the extent feasible supported by the same methods used internally by the organization. Condition and context: During our testing of 15 transactions reported as matching grant costs, we identified the following exceptions: 1. For 1 transaction, the basis for the valuation was not documented and there was no documentation of the distribution to clients within the match grant program. 2. For 1 transaction, the YMCA negotiated waived application fees for a transaction between a client and a third-party lessor and reported the waived fees as in-kind match. The YMCA was not a party within the lease transaction and therefore did not incur costs that meet the definition of in-kind. 3. For 2 transactions, federal commodities were used for match that were received from another federal program. Cause: Failure to follow the YMCA’s policies and procedures related to the valuation, distribution and documentation of in-kind items for the match grant. Effect: Failure to follow established policies and procedures resulted in errors and unallowable costs being reported for the matching grant and potentially failing to meet the annual match requirement. The YMCA will replace the unallowable reported costs with allowable reported costs by the final reporting period May 31, 2024. Recommendation: Provide additional training and emphasize adherence to established policies and procedures to ensure maintenance of documentation for valuation, distribution and documentation of matching grant funds. View of responsible officials: Management agrees with the finding. See Corrective Action Plan.