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The OIG audited the Central Valley Opportunity Center, Inc.'s (CVOC) administration of it Migrant and Seasonal Farmworker Program (MSFW) for Program Years 1995 and 1996 (July 1, 1995, through June 30, 1997) and the CVOC's costs reported on the Financial Status Reports (FSR). The audit also covered the CVOC's indirect cost rate proposals. We expanded the scope of our audit through September 30, 1998 in those areas where we noted problems.
Overall, we concluded that the CVOC properly met the objectives of the MSFW Program grant. However, the financial systems used to report costs on the FSRs and the indirect cost proposals need significant improvements to accurately reflect allowable costs in accordance with grant provisions, Federal regulations and OMB Circular A-122, and we questioned program costs totaling $526,728.
We recommended that the Assistant Secretary for Employment and Training direct the CVOC to:
- Improve internal controls by monitoring
administrative cost limitations.
- Comply with grant provisions and OMB Circular
A-122 regarding timely submission of final indirect cost rate
proposals.
- Establish specific internal controls to identify
and exclude all unallowable direct and indirect costs.
- Establish written procedures to ensure employability enhancements are fully supported in its participant files and participant data systems.
We also recommended that the Assistant Secretary disallow direct costs and associated administrative and indirect costs specified in the audit report. In addition, we recommended that the Director, Office of Cost Determination make final determinations on the questioned indirect costs and the questioned costs in the indirect cost pools.
CVOC agreed that administrative cost limitations had been exceeded, unrelated costs were charged to the MSFW program, and there were instances where lodging rates were exceeded and per diem rates were not calculated correctly. CVOC agreed to make the necessary adjustments for these instances. In addition, the CVOC provided additional documentation to support program charges.
Based on the CVOC's response, which included
additional documentation we revised our initial questioned costs amounts.
However, our basic conclusions and recommendations remain
unchanged.
(Report No.
09-00-003-03-365, issued June 2, 2000)
