GRADY ELECTRIC MEMBERSHIP CORPORATIONNon-Profit

CFDA Title and Number: 97.036 ? Disaster Grant ? Public Assistance Name of Federal Agency: Department of Homeland Security (DHS) Compliance/Internal Control over Compliance: Allowable Cost/Cost Principles Criteria: 2 CFR ? 200.431 Compensation ? fringe benefits (a) states that the costs of fringe benefits are allowable provided that the benefits are reasonable and are required by law, non-Federal entity-employee agreement, or an established policy of the non-Federal entity. OMB Circular A-122, ?Cost Principles for Non-Profit Organizations?, Attachment A, Basic Considerations, (2.) Factors affecting allowability of costs to be allowable under an award, cost must meet the following general criteria, (g.) Be adequately documented. Condition and Context: The Corporation used an unreasonable amount of days in calculating vacation and sick leave benefits for purposes of indirect allocation to force account labor per the Applicant?s Benefits Calculation Worksheet. The Corporation did not maintain sufficient records to substantiate the determination of the days used in the calculation. Cause: The Corporation?s grant administrator misinterpreted the instructions of the Applicant?s Benefits Calculation Worksheet. Although the FEMA program delivery manager was consulted while on-site, the Corporation did not obtain a sufficient understanding of the calculation to produce an accurate allocation rate. Effect or Potential Effect: Misstatement of force account labor costs. The Corporation is not in compliance with Federal requirements for the preparation and submission of accurate reports, increasing the risk of noncompliance and exposes the Corporation to the risk of loss of funding. Questioned Cost: $69,621 Recommendation: The Corporation should ensure a sufficient understanding of the grant requirements and ensure the accuracy of all reports and supporting documents prior to submission by referencing the authoritative guidance. The Corporation should ensure copies of all relevant supporting calculations and documents are maintained to support reports filed with oversight agencies. The Corporation should require a detail review of the calculation worksheets, such as the Applicant?s Benefit Calculation Worksheet, by someone independent of the preparer. Corporation?s Response: The Corporation concurs with the recommendation. The Corporation is developing policies and procedures for future grants, including maintaining proper records and ensuring independent, detail reviews are completed as necessary prior to grant submissions.