Finding Text
2023-002 – Internal Control over Compliance and Compliance with Period of Performance
Information on the Major Federal Program -
Federal Agency: United States Agency for International Development (USAID)
Program Name: USAID Foreign Assistance for Program Overseas
Assistance Listing Number: 98.001
Award Number: Various
Award Period: Various
Criteria – A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award, only to the extent that they would have been allowable if incurred after the date of the Federal award and only with the written approval of the Federal awarding agency.
Additionally, the Uniform Guidance in 2 CFR Section 200.344(b), states that unless the federal awarding agency or pass-through entity authorized an extension, a non-Federal entity must liquidate all financial obligations incurred under the Federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires the non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonable ensure compliance with Federal statutes, regulations, and other terms and conditions of the Federal Award.
The Uniform Guidance in 2 CFR Section 200.510 (b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR Section 200.502 Basis for determining Federal awards expended.” The SEFA must provide total Federal awards expended for each individual Federal program.
Condition – During our testing, we identified one (1) out of 40 sampled transactions was incurred outside the period of performance. Corus did not obtain written approval from the federal awarding agency for the specific project. As a result, total expenditure totaling $106,400 was improperly included in the SEFA.
Cause - The internal controls established for the review and reconciliation of the SEFA to the underlying accounting records were not consistently followed to ensure accurate charging of expenditures to the SEFA in the correct period.
Questioned Costs - None.
Context – This is a condition identified per review of Corus’ compliance with the specified requirements. Total expenditures of the specific project charged to the program was $106,400. These charges were removed from the SEFA presented for the year ended September 30, 2023.
Effect - Failure to properly review and support expenditures reported in the SEFA can result in inaccurate reporting and non-compliance with laws and regulations.
Repeat Finding - This is not a repeat finding.
Recommendation - Internal controls should be designed to prevent, detect and correct errors and/or omissions in a timely manner. Without adequate controls, Corus cannot provide reasonable assurance that the SEFA is fairly presented. We recommend management to strengthen its internal control to ensure complete and accurate SEFA.
Views of Responsible Officials - Corus management agrees with the findings and recommendations. The planned corrective actions are presented in Corus management’s corrective action plan attached as Appendix B to the Single Audit Report.