Finding 2019-006 Late Reporting and Noncompliance with Reporting Requirements
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Uniform Guidance requires that the reporting package be submitted within the earlier of 9 months after year end or 30 days after the report issuance in accordance with the provisions of 2 CFR part 200, subpart F, section 200.512.
Condition and Context: The Community did not adhere to the Uniform Guidance requirement of submitting the reporting package within the earlier of 30 days after the receipt of the audit report, or the nine months after the end of the audit period.
Cause: Lack of internal controls around Uniform Guidance requirements.
Effect: The Community was not in compliance with reporting requirements.
Questioned costs: None.
Repeat finding: This is a repeat of Finding 2018-005; therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management comply with Uniform Guidance reporting requirements.
Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2019-006 Late Reporting and Noncompliance with Reporting Requirements
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Uniform Guidance requires that the reporting package be submitted within the earlier of 9 months after year end or 30 days after the report issuance in accordance with the provisions of 2 CFR part 200, subpart F, section 200.512.
Condition and Context: The Community did not adhere to the Uniform Guidance requirement of submitting the reporting package within the earlier of 30 days after the receipt of the audit report, or the nine months after the end of the audit period.
Cause: Lack of internal controls around Uniform Guidance requirements.
Effect: The Community was not in compliance with reporting requirements.
Questioned costs: None.
Repeat finding: This is a repeat of Finding 2018-005; therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management comply with Uniform Guidance reporting requirements.
Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2019-007 Lack of Internal Control Over Cash Management
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: The requirement for cash management, as contained in 2 CFR 200.305, states advanced cash payments must be used only for applicable grant programs.
Condition and Context: Procedures related to cash management were inadequate to ensure that funds drawn down were not used for other grant expenditures. The Community’s cash balances at December 31, 2019 were $48,998 and total unearned revenue was $1,661,466, leading to a cash shortfall of $1,612,468. This resulted from the temporary borrowing of federal funds to pay expenses in the General Fund and other federal award programs. Deferred revenue as of December 31, 2019 in the CTG Program was $91,645 and $885,809 in the ISD Program.
Cause: Lack of internal controls over cash management.
Effect: The Community was not in compliance with 2 CFR 200.305 related to cash management requirements. Deposits were used to fund other programs of the Community.
Questioned costs: $1,612,468, which is the shortfall between cash balances and unearned revenue balances.
Repeat finding: This is a repeat of Finding 2018-006; therefore, we believe this to be a systemic issue.
Recommendation: We recommend the Community monitor grant budgets and drawdowns throughout the year and ensure that program funds are not being lent or borrowed between programs in an effort to ensure that unearned revenue balances do not exceed total cash.
Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2019-007 Lack of Internal Control Over Cash Management
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: The requirement for cash management, as contained in 2 CFR 200.305, states advanced cash payments must be used only for applicable grant programs.
Condition and Context: Procedures related to cash management were inadequate to ensure that funds drawn down were not used for other grant expenditures. The Community’s cash balances at December 31, 2019 were $48,998 and total unearned revenue was $1,661,466, leading to a cash shortfall of $1,612,468. This resulted from the temporary borrowing of federal funds to pay expenses in the General Fund and other federal award programs. Deferred revenue as of December 31, 2019 in the CTG Program was $91,645 and $885,809 in the ISD Program.
Cause: Lack of internal controls over cash management.
Effect: The Community was not in compliance with 2 CFR 200.305 related to cash management requirements. Deposits were used to fund other programs of the Community.
Questioned costs: $1,612,468, which is the shortfall between cash balances and unearned revenue balances.
Repeat finding: This is a repeat of Finding 2018-006; therefore, we believe this to be a systemic issue.
Recommendation: We recommend the Community monitor grant budgets and drawdowns throughout the year and ensure that program funds are not being lent or borrowed between programs in an effort to ensure that unearned revenue balances do not exceed total cash.
Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2019-008 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Per OMB 200.403(a) costs should be necessary and reasonable for the performance of the federal award.
Condition and Context: The Community could not provide adequate supporting documentation for non-payroll costs charged to the Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD) programs. During our review of non-payroll costs charged to the programs, the Community could not provide supporting documentation (invoice, check request, or management approval) for 8 out of 18 non-payroll transactions charged to the CTG program and 12 out of 12 non-payroll transactions charged to the ISD program.
Cause: Lack of internal controls over supporting documentation and approval over non-payroll transactions charged to the programs.
Effect: Lack of internal control over non-payroll transactions pose the risk that the Community will expend federal funds for non-grant purposes.
Questioned costs: Actual and likely questioned costs are below the reporting threshold of $25,000. Per our review of the transactions charged to the program, the expenditures appeared to be allowable; however, management was unable to provide adequate supporting documentation for us to determine for certain.
Repeat finding: This is a repeat of Finding 2018-007; therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management implement policies and procedures to ensure that only allowable costs are charged to the program and that supporting documentation be kept for all transactions.
Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2019-008 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Per OMB 200.403(a) costs should be necessary and reasonable for the performance of the federal award.
Condition and Context: The Community could not provide adequate supporting documentation for non-payroll costs charged to the Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD) programs. During our review of non-payroll costs charged to the programs, the Community could not provide supporting documentation (invoice, check request, or management approval) for 8 out of 18 non-payroll transactions charged to the CTG program and 12 out of 12 non-payroll transactions charged to the ISD program.
Cause: Lack of internal controls over supporting documentation and approval over non-payroll transactions charged to the programs.
Effect: Lack of internal control over non-payroll transactions pose the risk that the Community will expend federal funds for non-grant purposes.
Questioned costs: Actual and likely questioned costs are below the reporting threshold of $25,000. Per our review of the transactions charged to the program, the expenditures appeared to be allowable; however, management was unable to provide adequate supporting documentation for us to determine for certain.
Repeat finding: This is a repeat of Finding 2018-007; therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management implement policies and procedures to ensure that only allowable costs are charged to the program and that supporting documentation be kept for all transactions.
Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2019-009 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Per 2 CFR part 200.430, personnel expenses recorded into a federal program must be based on records that accurately reflect the work performed. Hourly employees should be paid for hours worked and documented through a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Internal controls procedures should be in place to ensure that all cash disbursements and payroll transactions are adequately supported by documentation, approved with accurate account coding on the approval form, retained for support either in the vendor, employee, or program file.
Condition and Context: During our payroll allowable costs testing we noted that the Community is incorrectly calculating the gross pay from the timesheets. The Community is taking the employee’s hourly rate multiplied by the hours worked with minutes calculated using 100 minutes per hour instead of 60 minutes. This results in an underpayment on any partial hour worked. We tested 13 payroll transactions charged to CTG program and 25 payroll transactions charged to the ISD program and noted that all transactions tested did not have approved pay rates in the employee personnel files.
Cause: Lack of internal controls over payroll transactions.
Effect: Lack of internal control over payroll transactions poses the risk that the Community will expend federal funds for non-grant purposes.
Questioned costs: None noted. In cases where an employee worked a partial hour, the employees were under paid. In reviewing the pay rates for each of the employees, they appeared reasonable and consistent with similar entities across the State.
Repeat finding: This is a repeat of Finding 2018-008, therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management implement policies and procedures to ensure that all paychecks are supported by an approved pay rate, hours worked agree to the hours paid and are accurately calculated.
Management Response: Management agrees with this finding, see Corrective Action Plan
Finding 2019-009 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Per 2 CFR part 200.430, personnel expenses recorded into a federal program must be based on records that accurately reflect the work performed. Hourly employees should be paid for hours worked and documented through a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Internal controls procedures should be in place to ensure that all cash disbursements and payroll transactions are adequately supported by documentation, approved with accurate account coding on the approval form, retained for support either in the vendor, employee, or program file.
Condition and Context: During our payroll allowable costs testing we noted that the Community is incorrectly calculating the gross pay from the timesheets. The Community is taking the employee’s hourly rate multiplied by the hours worked with minutes calculated using 100 minutes per hour instead of 60 minutes. This results in an underpayment on any partial hour worked. We tested 13 payroll transactions charged to CTG program and 25 payroll transactions charged to the ISD program and noted that all transactions tested did not have approved pay rates in the employee personnel files.
Cause: Lack of internal controls over payroll transactions.
Effect: Lack of internal control over payroll transactions poses the risk that the Community will expend federal funds for non-grant purposes.
Questioned costs: None noted. In cases where an employee worked a partial hour, the employees were under paid. In reviewing the pay rates for each of the employees, they appeared reasonable and consistent with similar entities across the State.
Repeat finding: This is a repeat of Finding 2018-008, therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management implement policies and procedures to ensure that all paychecks are supported by an approved pay rate, hours worked agree to the hours paid and are accurately calculated.
Management Response: Management agrees with this finding, see Corrective Action Plan
Finding 2019-006 Late Reporting and Noncompliance with Reporting Requirements
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Uniform Guidance requires that the reporting package be submitted within the earlier of 9 months after year end or 30 days after the report issuance in accordance with the provisions of 2 CFR part 200, subpart F, section 200.512.
Condition and Context: The Community did not adhere to the Uniform Guidance requirement of submitting the reporting package within the earlier of 30 days after the receipt of the audit report, or the nine months after the end of the audit period.
Cause: Lack of internal controls around Uniform Guidance requirements.
Effect: The Community was not in compliance with reporting requirements.
Questioned costs: None.
Repeat finding: This is a repeat of Finding 2018-005; therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management comply with Uniform Guidance reporting requirements.
Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2019-006 Late Reporting and Noncompliance with Reporting Requirements
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Uniform Guidance requires that the reporting package be submitted within the earlier of 9 months after year end or 30 days after the report issuance in accordance with the provisions of 2 CFR part 200, subpart F, section 200.512.
Condition and Context: The Community did not adhere to the Uniform Guidance requirement of submitting the reporting package within the earlier of 30 days after the receipt of the audit report, or the nine months after the end of the audit period.
Cause: Lack of internal controls around Uniform Guidance requirements.
Effect: The Community was not in compliance with reporting requirements.
Questioned costs: None.
Repeat finding: This is a repeat of Finding 2018-005; therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management comply with Uniform Guidance reporting requirements.
Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2019-007 Lack of Internal Control Over Cash Management
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: The requirement for cash management, as contained in 2 CFR 200.305, states advanced cash payments must be used only for applicable grant programs.
Condition and Context: Procedures related to cash management were inadequate to ensure that funds drawn down were not used for other grant expenditures. The Community’s cash balances at December 31, 2019 were $48,998 and total unearned revenue was $1,661,466, leading to a cash shortfall of $1,612,468. This resulted from the temporary borrowing of federal funds to pay expenses in the General Fund and other federal award programs. Deferred revenue as of December 31, 2019 in the CTG Program was $91,645 and $885,809 in the ISD Program.
Cause: Lack of internal controls over cash management.
Effect: The Community was not in compliance with 2 CFR 200.305 related to cash management requirements. Deposits were used to fund other programs of the Community.
Questioned costs: $1,612,468, which is the shortfall between cash balances and unearned revenue balances.
Repeat finding: This is a repeat of Finding 2018-006; therefore, we believe this to be a systemic issue.
Recommendation: We recommend the Community monitor grant budgets and drawdowns throughout the year and ensure that program funds are not being lent or borrowed between programs in an effort to ensure that unearned revenue balances do not exceed total cash.
Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2019-007 Lack of Internal Control Over Cash Management
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: The requirement for cash management, as contained in 2 CFR 200.305, states advanced cash payments must be used only for applicable grant programs.
Condition and Context: Procedures related to cash management were inadequate to ensure that funds drawn down were not used for other grant expenditures. The Community’s cash balances at December 31, 2019 were $48,998 and total unearned revenue was $1,661,466, leading to a cash shortfall of $1,612,468. This resulted from the temporary borrowing of federal funds to pay expenses in the General Fund and other federal award programs. Deferred revenue as of December 31, 2019 in the CTG Program was $91,645 and $885,809 in the ISD Program.
Cause: Lack of internal controls over cash management.
Effect: The Community was not in compliance with 2 CFR 200.305 related to cash management requirements. Deposits were used to fund other programs of the Community.
Questioned costs: $1,612,468, which is the shortfall between cash balances and unearned revenue balances.
Repeat finding: This is a repeat of Finding 2018-006; therefore, we believe this to be a systemic issue.
Recommendation: We recommend the Community monitor grant budgets and drawdowns throughout the year and ensure that program funds are not being lent or borrowed between programs in an effort to ensure that unearned revenue balances do not exceed total cash.
Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2019-008 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Per OMB 200.403(a) costs should be necessary and reasonable for the performance of the federal award.
Condition and Context: The Community could not provide adequate supporting documentation for non-payroll costs charged to the Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD) programs. During our review of non-payroll costs charged to the programs, the Community could not provide supporting documentation (invoice, check request, or management approval) for 8 out of 18 non-payroll transactions charged to the CTG program and 12 out of 12 non-payroll transactions charged to the ISD program.
Cause: Lack of internal controls over supporting documentation and approval over non-payroll transactions charged to the programs.
Effect: Lack of internal control over non-payroll transactions pose the risk that the Community will expend federal funds for non-grant purposes.
Questioned costs: Actual and likely questioned costs are below the reporting threshold of $25,000. Per our review of the transactions charged to the program, the expenditures appeared to be allowable; however, management was unable to provide adequate supporting documentation for us to determine for certain.
Repeat finding: This is a repeat of Finding 2018-007; therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management implement policies and procedures to ensure that only allowable costs are charged to the program and that supporting documentation be kept for all transactions.
Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2019-008 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Per OMB 200.403(a) costs should be necessary and reasonable for the performance of the federal award.
Condition and Context: The Community could not provide adequate supporting documentation for non-payroll costs charged to the Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD) programs. During our review of non-payroll costs charged to the programs, the Community could not provide supporting documentation (invoice, check request, or management approval) for 8 out of 18 non-payroll transactions charged to the CTG program and 12 out of 12 non-payroll transactions charged to the ISD program.
Cause: Lack of internal controls over supporting documentation and approval over non-payroll transactions charged to the programs.
Effect: Lack of internal control over non-payroll transactions pose the risk that the Community will expend federal funds for non-grant purposes.
Questioned costs: Actual and likely questioned costs are below the reporting threshold of $25,000. Per our review of the transactions charged to the program, the expenditures appeared to be allowable; however, management was unable to provide adequate supporting documentation for us to determine for certain.
Repeat finding: This is a repeat of Finding 2018-007; therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management implement policies and procedures to ensure that only allowable costs are charged to the program and that supporting documentation be kept for all transactions.
Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2019-009 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Per 2 CFR part 200.430, personnel expenses recorded into a federal program must be based on records that accurately reflect the work performed. Hourly employees should be paid for hours worked and documented through a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Internal controls procedures should be in place to ensure that all cash disbursements and payroll transactions are adequately supported by documentation, approved with accurate account coding on the approval form, retained for support either in the vendor, employee, or program file.
Condition and Context: During our payroll allowable costs testing we noted that the Community is incorrectly calculating the gross pay from the timesheets. The Community is taking the employee’s hourly rate multiplied by the hours worked with minutes calculated using 100 minutes per hour instead of 60 minutes. This results in an underpayment on any partial hour worked. We tested 13 payroll transactions charged to CTG program and 25 payroll transactions charged to the ISD program and noted that all transactions tested did not have approved pay rates in the employee personnel files.
Cause: Lack of internal controls over payroll transactions.
Effect: Lack of internal control over payroll transactions poses the risk that the Community will expend federal funds for non-grant purposes.
Questioned costs: None noted. In cases where an employee worked a partial hour, the employees were under paid. In reviewing the pay rates for each of the employees, they appeared reasonable and consistent with similar entities across the State.
Repeat finding: This is a repeat of Finding 2018-008, therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management implement policies and procedures to ensure that all paychecks are supported by an approved pay rate, hours worked agree to the hours paid and are accurately calculated.
Management Response: Management agrees with this finding, see Corrective Action Plan
Finding 2019-009 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles
Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services
Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively
CFDA Numbers: 15.021 and 93.441, respectively
Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively
Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD)
Type of Finding: Material weakness in internal control over compliance and material noncompliance.
Criteria: Per 2 CFR part 200.430, personnel expenses recorded into a federal program must be based on records that accurately reflect the work performed. Hourly employees should be paid for hours worked and documented through a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Internal controls procedures should be in place to ensure that all cash disbursements and payroll transactions are adequately supported by documentation, approved with accurate account coding on the approval form, retained for support either in the vendor, employee, or program file.
Condition and Context: During our payroll allowable costs testing we noted that the Community is incorrectly calculating the gross pay from the timesheets. The Community is taking the employee’s hourly rate multiplied by the hours worked with minutes calculated using 100 minutes per hour instead of 60 minutes. This results in an underpayment on any partial hour worked. We tested 13 payroll transactions charged to CTG program and 25 payroll transactions charged to the ISD program and noted that all transactions tested did not have approved pay rates in the employee personnel files.
Cause: Lack of internal controls over payroll transactions.
Effect: Lack of internal control over payroll transactions poses the risk that the Community will expend federal funds for non-grant purposes.
Questioned costs: None noted. In cases where an employee worked a partial hour, the employees were under paid. In reviewing the pay rates for each of the employees, they appeared reasonable and consistent with similar entities across the State.
Repeat finding: This is a repeat of Finding 2018-008, therefore, we believe this to be a systemic issue.
Recommendation: We recommend that management implement policies and procedures to ensure that all paychecks are supported by an approved pay rate, hours worked agree to the hours paid and are accurately calculated.
Management Response: Management agrees with this finding, see Corrective Action Plan