Finding Text
#2022-004 – Material Weakness – Activities Allowed or Unallowed, Reporting, Cash Management, Period of Performance
Opioid STR Grant ALN 93.788
Block Grants for Prevention and Treatment of Substance Abuse 93.959
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards.
In accordance with 45 CFR § 75.403, “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:
(a) be necessary and reasonable for the performance
(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items.
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(g) Be adequately documented.”
Condition
During the audit we noted the Organization reported the following expenses that were not supported by the accounting records or supporting documentation:
For the monthly reports tested, we were unable to examine supporting invoices or supporting documentation for $31,721.92 of the $90,546.79 charges reviewed. Additionally, for these items, because invoices or other support was not available, we were unable to verify the service period and whether the expense was charged to the correct grant period.
Cause
The cause is a lack of a proper control structure that includes retention of all supporting documentation for expenses and proper tracking of expenses charged to the grant programs.
Effect
The potential effects are overbilling the grant program and unsupported charges.
Questioned Costs
$149,061
Perspective Information
We reviewed a sample of reports filed with the Pennsylvania Department of Military and Veterans Affairs and the Drug and Alcohol Program. We examined the payroll for each employee charged to the grant for a total of twenty-six employees. We also tested nonpayroll related expenses charged to the grant. The finding represents the unsupported costs noted from this review.
Identification as a repeat finding
A similar issue was noted in prior year finding #2021-004.
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Recommendation
We recommend that the Organization develop a system to track all expenses charged to each grant contract by month and systematically file all supporting documentation in a manner that can easily be accessed. This information must be retained in accordance with the Federal and grant guidelines. The monthly reports filed for the grants should be supported by the Organization’s accounting records and invoices. We further recommend that the Organization perform a reconciliation between the monthly reports and the accounting records.