DEPARMENT OF HUMAN SEVICES Community Action Minneapolis 2013-7

FY12 to FY13

Attribute Testing Plan and Conclusions Testing Objective(s): To determine if the costs charged to each grant were allowable and meet the grant and other requirements. Testing Population: The testing population includes expenditures charged to the Community Services Block Grant (CBSG) and Community Action Grant (CAG) grants for FY11 – FY13. The total expenditures for the CBSG grants (funds 846, 848, and 850) are $2,176,401.26. The total expenditures for the CAG grants (funds 847 and 849) are $997,438.00. Key Characteristics of the population: The population consists of expenditures charged to the CBSG and CAG grants during our scope. These grants are federally funded pass through grants Definition of a sampling unit: One transaction charged to a grant Sample Selection Methodology and Size (identify key items): The testing and sample selection was done it two parts. The first part was a population analysis of both grants. And the second was sample testing for board allowance and training costs. Key Attributes:

A. Did the expenditure meet the requirements for allowable/unallowable costs stated in OMB circular A-122?

B. Did the expenditure meet the requirements for allowable/unallowable costs stated in the grant agreement?

C. Was the cost a reasonable based on the program requirements? D. If the expenditure for travel reimbursement for meals, lodging, and air, did the

expenditures meet the requirements stated in the commissioner's plan? Definition of Error or Deviation: An error is defined as any attribute not met. Expected error rate in the sampled items: I expect no errors Test Procedures Applied to Sample Items: I created an Access database using the excel spreadsheet of their general ledger, provided by CAM. I then made an object code description table to help categorize the expenditures; I created the table by manually entering the object code descriptions provided in a pdf from CAM.

• I first queried the population for each grant by object code and by category

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DEPARMENT OF HUMAN SEVICES Community Action Minneapolis 2013-7

FY12 to FY13 • I then queried the population by fund and fiscal year to compare the grant spending to

other types of spending • I review the grants by object code and by category and then selected several transactions

for review. Note: I am following up on work already performed by two DHS auditors, therefore, the sample size will be small.

Testing Results: See Sample Testing Worksheet expendi u e analysis

Melan e xlsx • It was determined that all out of state travel expenditures were not eligible for

reimbursement because the grant agreement required prior approval from the state; which CAM did not request. Based on the general ledger coding, the CBSG had a total of $40,353.50 in expenditures coded to out of town travel and CAG had a total of $12,202.45. However, not all costs related to the out of state travel were charged to this object code. Other out of state travel costs were coded to training costs (object code 5980), board allowance (object code 6812), administrative training (object code 5983), and conference reimbursements (object code 6510). I requested that the other two auditors compile the total costs associated with out of state travel, this would include per diems, meals, lodging, car rental, parking, air fare, and conference registration fees.

o In addition, there was no support in the working papers to show the business reason for the travel; no conference agendas on file.

o Based on the grant agreement, CAM is required to follow the Commissioner’s plan for travel reimbursements. We could find no evidence that this was followed. If a conference provides meals as a part of the registration fee, no employee should be reimbursed for meals already paid for using the registration fee. Also, food and bar charges were also paid for under the lodging costs because they were charged to the room.

o Also, a lot of costs are hidden in credit card statements and the exact receipts showing the detail for the charges were not on file.

• It was determined that all of the board allowance costs were not eligible for reimbursement. The majority of the activities charged to this object code were for two spa weekends for staff and board members (including spouses). The total for the CSBG is $30,640.58 and the total for the CAG is $4,252.75.

• In addition, it was not sufficient support for the expenditures charged to employee morale (object code 7502). The other two auditor need to review this code in more detail to determine if there are any questioned costs.

• For the sample testing, I selected samples coded to board allowance and training. The

results are as followed: board al owance and train ng CBSG expend

o 3 out of 5 samples did not meet attribute A for the CSBG grant and 4 out of 5 samples did not meet attribute A for the CAG grant.

o 4 out of 5 samples did not meet attribute B for the CSBG grant and 4 out of 5 samples did not meet attribute B for the CAG grant.

o 3 out of 5 samples did not meet attribute C for the CSBG grant and 4 out of 5 samples did not meet attribute C for the CAG grant.

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DEPARMENT OF HUMAN SEVICES Community Action Minneapolis 2013-7

FY12 to FY13 o 4 out of 5 samples did not meet attribute D for the CSBG grant and 4 out of 5

samples did not meet attribute D for the CAG grant. Testing Conclusion: Based on the testing, not all costs charged to each grant were allowable and meet the grant and other requirements. See the findings in the report.

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