Audit 26204

Finding number: 2022-001 AL number: 14.231 AL title: Emergency Solutions Grants Program Federal award identification number and year: 32101372, 32101373, 32101371, 32101283, 32101297; 2022 Name of Federal agency: Department of Housing and Development Urban Name of pass-through entity: County of Marin Repeat finding: No Criteria: Per 2 CFR 200.430, "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed", and records must be "supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated". Furthermore, "budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards", and there must be an after-the-fact review to ensure payroll costs are accurately allocated. Condition: During our testing of payroll costs charged to the Federal award, we noted that from the start of the award period through June 2022 the Society allocated and charged payroll costs to the Federal award based on budget estimates and an after-the-fact review was not performed. This resulted in the Federal award not being charged for the actual costs incurred for the award. Management performed an analysis of the time incurred and charged to the Federal award and determined that the Society overbilled the Federal award $68,357 and $47,532 during the years ended September 30, 2022 and 2021, respectively. Management revised the process for allocating payroll costs in July 2022 to a methodology that reflects the actual time incurred. Cause: The Society previously had not administered Federal awards subject to the Uniform Guidance and therefore did not have a system of internal control in place that complies with the standards for documentation of personnel expenses required by the Uniform Guidance. Possible effect: The Society overbilled the Federal award by $115,889 over a two year period. Questioned cost: Management performed an analysis of the time incurred and charged to the Federal award and determined that the Society overbilled the Federal award $68,357 and $47,532 during the years ended September 30, 2022 and 2021, respectively. Recommendation: We recommend that the Society continue to follow the internal controls and procedures around payroll allocation that were implemented in July 2022. Management should continue to ensure that all payroll costs are allocated to Federal awards based on the actual time spent by each employee. Views of responsible officials: Management concurs with the finding and will continue to follow the revised methodology that was implemented in July 2022 for allocating payroll costs to Federal awards such that payroll costs charged to Federal awards

Finding number: 2022-001 AL number: 14.231 AL title: Emergency Solutions Grants Program Federal award identification number and year: 32101372, 32101373, 32101371, 32101283, 32101297; 2022 Name of Federal agency: Department of Housing and Development Urban Name of pass-through entity: County of Marin Repeat finding: No Criteria: Per 2 CFR 200.430, "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed", and records must be "supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated". Furthermore, "budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards", and there must be an after-the-fact review to ensure payroll costs are accurately allocated. Condition: During our testing of payroll costs charged to the Federal award, we noted that from the start of the award period through June 2022 the Society allocated and charged payroll costs to the Federal award based on budget estimates and an after-the-fact review was not performed. This resulted in the Federal award not being charged for the actual costs incurred for the award. Management performed an analysis of the time incurred and charged to the Federal award and determined that the Society overbilled the Federal award $68,357 and $47,532 during the years ended September 30, 2022 and 2021, respectively. Management revised the process for allocating payroll costs in July 2022 to a methodology that reflects the actual time incurred. Cause: The Society previously had not administered Federal awards subject to the Uniform Guidance and therefore did not have a system of internal control in place that complies with the standards for documentation of personnel expenses required by the Uniform Guidance. Possible effect: The Society overbilled the Federal award by $115,889 over a two year period. Questioned cost: Management performed an analysis of the time incurred and charged to the Federal award and determined that the Society overbilled the Federal award $68,357 and $47,532 during the years ended September 30, 2022 and 2021, respectively. Recommendation: We recommend that the Society continue to follow the internal controls and procedures around payroll allocation that were implemented in July 2022. Management should continue to ensure that all payroll costs are allocated to Federal awards based on the actual time spent by each employee. Views of responsible officials: Management concurs with the finding and will continue to follow the revised methodology that was implemented in July 2022 for allocating payroll costs to Federal awards such that payroll costs charged to Federal awards