Finding Text
Criteria and Condition: The Foreign Market Development Cooperator Program requires matching contributions equal to 185% of project expenditures. These contributions must include expenditures that have been incurred and are allowable under 2 CFR Part 200, Subpart E (CostPrinciples).
Context: A test of the 2023 project contribution amounts for program year 2022 revealed that the contribution amount was being calculated by USSEC through an allocation rate of all program expenditures funded with non-federal revenue sources. These expenditures include unallowable costs under 2 CFR Part 200, Subpart E that are required to be excluded from the calculation of the total project contribution amount.
Cause: Expenditures used to meet the matching requirement were not reviewed to determine if costs were allowable under 2 CFR Part 200, Subpart E.
Questioned Cost: $-0- No questioned costs are reported as the Association has demonstrated allowable matching costs were incurred in excess of the requirement.
Effect: Project expenditures that are unallowable are included within the matching contribution rate.
Recommendation: We recommend that USSEC management reviews each expense included within the matching contribution total to verify that they have been incurred and are allowable under 2 CFR Part 200, Subpart E.
Classification: Compliance finding and control deficiency in internal controls.
View of Responsible Officials and Planned Corrective Actions: USSEC will review expenses included in the Contribution Report more closely to ensure they are allowable under 2 CFR Part 200, Subpart E. For the report being submitted in June 2024 for program year 2023, all expenses related to meals, travel-related meals, and group meals at events will be removed. Food and beverages, including alcoholic beverages will not be included in the 2023 EOY Report.