THE CENTER FOR RELATIONSHIP EDUCATION

Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Healthy Marriage Promotion and Responsible Fatherhood Grants CFDA Number 93.086 Award Period: October 1, 2024 through September 30, 2025 Type of Finding:  Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: The Code of Federal Regulations 2 CFR 200.403, states, "Closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period.” Condition: The organization requested reimbursement for a prepayment to a third party for services to be provided in 2026, outside of the period of performance. Context: In our review of 40 nonpayroll disbursements we noted one instance where the organization allocated expenses to the major program and were reimbursed by the awarding agency for costs that were not incurred within the period of performance. Questioned Costs: $14,300 Effect: Unallowable costs of $14,300 were charged to the major program. Repeat Finding: This is not a repeat finding Recommendation: We recommend that the organization implement a process to review all invoices to determine when the expense will be incurred to ensure that only costs incurred within the period of availability are charged to the major program. Views of responsible officials: Management disagrees with the finding. Management charged the audit cost to the award that received the benefit of the audit services because management determined that award to be the appropriate cost objective. The audit was required because of the financial activity conducted under the completed ACF award. The audit tested costs incurred, funds drawn, financial reporting, internal control, and compliance obligations arising from that award. Management does not believe the cost provided a programmatic or administrative benefit to a later federal award. Charging the cost to a subsequent award solely because the audit work or payment occurred after the award end date would have resulted in a different federal award, and potentially a different federal agency, bearing the cost of audit procedures performed on activity attributable to the completed ACF award. Auditors’ response to views of responsible officials: We have considered management’s response and acknowledge management’s position that the audit services related to activity under the completed ACF award. However, our finding is based on the period-of-performance requirement in 2 CFR 200.403, which provides that, except for allowable closeout costs incurred and liquidated within the required closeout reporting period, costs must be incurred during the approved budget period of the federal award. The cost identified in the finding represented a prepayment to a third party for services to be provided in 2026, which was outside the award’s period of performance of October 1, 2024 through September 30, 2025. Accordingly, we continue to believe the cost was not incurred within the approved budget period and was not allowable to the award. Therefore, the finding and questioned costs of $14,300 remain unchanged.