Finding Text
2023-005 – Allowable Costs and Activities
Federal agency: U.S. Treasury
Federal program title: Coronavirus State and Local Fiscal Recovery Funds
Assistance Listing Number: 21.027
Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; Illinois Criminal Justice Information Authority
Pass-Through Number(s): 20220246 - 2023; 20220245 - 2023; 822007 - 2023
Award Period: 3/1/22-12/31/23; 3/1/22-12/31/23; 3/1/22-12/31/24; 4/1/22-6/30/23
Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: Code of Federal Regulations (CFR) § 200.303(a) indicates non-federal entities 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: Lack of supporting documentation showing management's review and approval of costs as being allowable under the grant terms.
Questioned costs: N/A
Context: For 33 of the 60 allowable general disbursement cost transactions selected for testing, there was no documentation showing management's review and approval of the expense as being allowable. For 3 of 18 allowable payroll disbursement cost transactions selected for testing, there was no documented approval of the employee's rate to support the rate was correct for the expense incurred.
Cause: Error by management when reviewing the expenses to document their review on the invoice or other supporting documentation.
Effect: If costs are not reviewed and approved as being allowable, it could result in unallowable costs being charged to federal grants.
Repeat Finding: No
Recommendation: We recommend the Organization enhance its internal controls in order to require the maintaining of appropriate supporting documentation to show the review and approval of expenses charged to grants, prior to drawing down grant funds.
Views of responsible officials: It is the policy that either Marlon Mitchell or James Kilgore approve expenditures of the programs. FirstFollowers is not in the habit of initialing the invoices, so we will purchase a stamp to provide physical evidence that the invoice requests and/or receipts have completed the review steps. Either Marlon or James will date/initial with the approval stamp. All the contractors and employees have a yearly review of their salary and/or hourly rates. Those contracts are written and kept in the files of FirstFollowers and were provided to Clifton Larson Allen upon request. We will continue to update these contracts each fiscal year and ensure that the contracts are reviewed by the Board of Directors and noted in the minutes.