2023-003: Filing of Federal Reports SF-425
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612
Compliance and Internal Controls Significant Deficiency
Category of Finding – Reporting
Criteria – IPTF is required to submit Federal Financial Reports (SF-425) semi-annually within 30 days of period end.
Condition – The September 30, 2022 and March 30, 2023 SF-425 reports were filed on March 2, 2023 and May 1, 2023, outside the 30 day filing requirement.
Cause – IPTF had turnover in the contract accountant. After taking over, the new contract accountant was not aware of their responsibility for these federal reporting requirements.
Effect – Failure to submit reports within the required period may result in IPTF’s status to be delinquent and not be able to draw down funds on the award.
Recommendation – We recommend that management implement a formal process that clearly defines who is responsible for preparing these reports and to ensure that federal reports are prepared and reviewed timely.
Auditee’s comments and response – IPTF hired a new contract accountant, who is responsible for ensuring that the accounting records are prepared accurately and to ensure that these required reports are submitted on time.
Responsible party for corrective action – Sharon Day, Executive Director
Repeat finding – 2022-003
2023-003: Filing of Federal Reports SF-425
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612
Compliance and Internal Controls Significant Deficiency
Category of Finding – Reporting
Criteria – IPTF is required to submit Federal Financial Reports (SF-425) semi-annually within 30 days of period end.
Condition – The September 30, 2022 and March 30, 2023 SF-425 reports were filed on March 2, 2023 and May 1, 2023, outside the 30 day filing requirement.
Cause – IPTF had turnover in the contract accountant. After taking over, the new contract accountant was not aware of their responsibility for these federal reporting requirements.
Effect – Failure to submit reports within the required period may result in IPTF’s status to be delinquent and not be able to draw down funds on the award.
Recommendation – We recommend that management implement a formal process that clearly defines who is responsible for preparing these reports and to ensure that federal reports are prepared and reviewed timely.
Auditee’s comments and response – IPTF hired a new contract accountant, who is responsible for ensuring that the accounting records are prepared accurately and to ensure that these required reports are submitted on time.
Responsible party for corrective action – Sharon Day, Executive Director
Repeat finding – 2022-003
2023-002: Maintaining Invoices
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.939
Compliance and Internal Controls Material Weakness
Category of Finding – Allowable Costs/ Cost Principles
Criteria – Internal control procedures should ensure that approved invoices are maintained as documentation of allowable costs.
Condition – IPTF has an internal control process designed to obtain and maintain approved invoices for allowable costs, but the controls did not operate as designed.
Cause – IPTF faced turnover in the contract accountant position during the fiscal year. A disbursement paid around the time of this transition was missing proper supporting documentation.
Effect – Unallowable expenses could be paid by the program or expenses could be paid multiple times by accident.
Context – A nonstatistical sample of 20 transactions were selected for testing. The supporting invoice for one transaction could not be provided.
Recommendation – We recommend the procedures related to obtaining and maintaining proper documentation be reviewed with applicable employees to ensure that required documentation is maintained.
Auditee’s comments and response – IPTF hired a new contract accountant and began using bill.com to store documentation supporting all costs and to ensure the related approvals are maintained.
Responsible party for corrective action – Sharon Day, Executive Director
Repeat finding – No
2023-001: Overspent Grant
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.243
Compliance and Internal Controls Material Weakness
Category of Finding – Cash Management
Criteria – 2 CFR § 200.302(b), requires entities to have written policies and procedures to accurately track grant accounting. Per the grant agreement, the grant must be earned on a reimbursement basis, which requires eligible expenditures to be incurred in order to earn the grant revenue.
Condition – During fiscal year 2023, IPTF recorded $5,821 more revenue on the SAMSHA grant than the related eligible expenditures.
Cause – IPTF had turnover in the contract accounting function/position. Multiple adjustments were made in the accounting software by the former contract accounting prior to the transition, which were difficult to trace back to and ultimately, actual costs incurred under the grant were miscalculated and overstated.
Effect – As a result of this condition, IPTF was noncompliant with the grant and recognized more revenue than allowed based on eligible costs.
Questioned Costs – $5,821
Recommendation – We recommend that management ensure internal financials are reviewed on a monthly basis to ensure completeness and accuracy, which includes having grant specific financials reviewed by the program managers. Also, we recommend contacting the grantor to discuss the need to repay the $5,821.
Auditee’s comments and response – IPTF hired a new contract accountant in October 2022 and have since implemented processes to ensure accurate internal financial statements are prepared and reviewed by program managers on a monthly basis as required by their written financial policies.
Responsible party for corrective action – Sharon Day, Executive Director
Repeat finding – No
2023-004: Lack of Payroll Documentation
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612 and 93.939
Internal Controls Significant Deficiency
Category of Finding – Allowable Costs/ Cost Principles
Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition – During our audit, we noticed multiple employees' approved pay rates were not retained or did not agree with the actual amount paid and recorded in accounting system.
Cause – Procedure in place was not followed to ensure that all wage rates get approvals and are documented in employee personnel files.
Effect – Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Salaries or wages may be overcharged or undercharged to grant if pay rates are not documented.
Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Employee’s actual pay rate did not agree or was not supported by approved pay rate for 19 transactions.
Recommendation – We recommend the management review personnel files to ensure all required documentation is retained and accurate. We also recommend management review and update policies and procedures to ensure responsibilities are clear and future files are complete.
Auditee’s comments and response – Management will review policies and procedures to ensure information is complete and up-to-date.
Responsible party for corrective action: Sharon Day, Executive Director
Repeat finding – No
2023-004: Lack of Payroll Documentation
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612 and 93.939
Internal Controls Significant Deficiency
Category of Finding – Allowable Costs/ Cost Principles
Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition – During our audit, we noticed multiple employees' approved pay rates were not retained or did not agree with the actual amount paid and recorded in accounting system.
Cause – Procedure in place was not followed to ensure that all wage rates get approvals and are documented in employee personnel files.
Effect – Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Salaries or wages may be overcharged or undercharged to grant if pay rates are not documented.
Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Employee’s actual pay rate did not agree or was not supported by approved pay rate for 19 transactions.
Recommendation – We recommend the management review personnel files to ensure all required documentation is retained and accurate. We also recommend management review and update policies and procedures to ensure responsibilities are clear and future files are complete.
Auditee’s comments and response – Management will review policies and procedures to ensure information is complete and up-to-date.
Responsible party for corrective action: Sharon Day, Executive Director
Repeat finding – No
2023-004: Lack of Payroll Documentation
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612 and 93.939
Internal Controls Significant Deficiency
Category of Finding – Allowable Costs/ Cost Principles
Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition – During our audit, we noticed multiple employees' approved pay rates were not retained or did not agree with the actual amount paid and recorded in accounting system.
Cause – Procedure in place was not followed to ensure that all wage rates get approvals and are documented in employee personnel files.
Effect – Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Salaries or wages may be overcharged or undercharged to grant if pay rates are not documented.
Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Employee’s actual pay rate did not agree or was not supported by approved pay rate for 19 transactions.
Recommendation – We recommend the management review personnel files to ensure all required documentation is retained and accurate. We also recommend management review and update policies and procedures to ensure responsibilities are clear and future files are complete.
Auditee’s comments and response – Management will review policies and procedures to ensure information is complete and up-to-date.
Responsible party for corrective action: Sharon Day, Executive Director
Repeat finding – No
2023-005: Payroll Timecard Approval
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612 and 93.939
Compliance and Internal Controls Significant Deficiency
Category of Finding – Allowable Costs/ Cost Principles
Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition – During testing, we noticed multiple timecards not approved by the responsible individual so the required supervisors’ review of the timecard for accurate hours and allocations did not occur and was not documented.
Cause – Controls in place did not operate as designed so hours charged to the grant were not properly reviewed for accuracy by responsible individuals.
Effect – Salaries or wages may be overcharged or undercharged to grant if program allocation is not documented. If the granting agency ever questioned costs, IPTF may not be able to prove that all the funds requested for reimbursement from the agency were for activities allowed under the grant.
Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Timecard approval was missing or performed by an unauthorized individual for 7 transactions.
Recommendation – We recommend the management implement and enforce a review process to ensure all timecards are reviewed by responsible individual.
Auditee’s comments and response – Management will review policies and procedures to ensure all timecards are reviewed by responsible individual.
Responsible party for corrective action: Sharon Day, Executive Director
Repeat finding – No
2023-005: Payroll Timecard Approval
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612 and 93.939
Compliance and Internal Controls Significant Deficiency
Category of Finding – Allowable Costs/ Cost Principles
Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition – During testing, we noticed multiple timecards not approved by the responsible individual so the required supervisors’ review of the timecard for accurate hours and allocations did not occur and was not documented.
Cause – Controls in place did not operate as designed so hours charged to the grant were not properly reviewed for accuracy by responsible individuals.
Effect – Salaries or wages may be overcharged or undercharged to grant if program allocation is not documented. If the granting agency ever questioned costs, IPTF may not be able to prove that all the funds requested for reimbursement from the agency were for activities allowed under the grant.
Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Timecard approval was missing or performed by an unauthorized individual for 7 transactions.
Recommendation – We recommend the management implement and enforce a review process to ensure all timecards are reviewed by responsible individual.
Auditee’s comments and response – Management will review policies and procedures to ensure all timecards are reviewed by responsible individual.
Responsible party for corrective action: Sharon Day, Executive Director
Repeat finding – No
2023-005: Payroll Timecard Approval
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612 and 93.939
Compliance and Internal Controls Significant Deficiency
Category of Finding – Allowable Costs/ Cost Principles
Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition – During testing, we noticed multiple timecards not approved by the responsible individual so the required supervisors’ review of the timecard for accurate hours and allocations did not occur and was not documented.
Cause – Controls in place did not operate as designed so hours charged to the grant were not properly reviewed for accuracy by responsible individuals.
Effect – Salaries or wages may be overcharged or undercharged to grant if program allocation is not documented. If the granting agency ever questioned costs, IPTF may not be able to prove that all the funds requested for reimbursement from the agency were for activities allowed under the grant.
Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Timecard approval was missing or performed by an unauthorized individual for 7 transactions.
Recommendation – We recommend the management implement and enforce a review process to ensure all timecards are reviewed by responsible individual.
Auditee’s comments and response – Management will review policies and procedures to ensure all timecards are reviewed by responsible individual.
Responsible party for corrective action: Sharon Day, Executive Director
Repeat finding – No
2023-003: Filing of Federal Reports SF-425
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612
Compliance and Internal Controls Significant Deficiency
Category of Finding – Reporting
Criteria – IPTF is required to submit Federal Financial Reports (SF-425) semi-annually within 30 days of period end.
Condition – The September 30, 2022 and March 30, 2023 SF-425 reports were filed on March 2, 2023 and May 1, 2023, outside the 30 day filing requirement.
Cause – IPTF had turnover in the contract accountant. After taking over, the new contract accountant was not aware of their responsibility for these federal reporting requirements.
Effect – Failure to submit reports within the required period may result in IPTF’s status to be delinquent and not be able to draw down funds on the award.
Recommendation – We recommend that management implement a formal process that clearly defines who is responsible for preparing these reports and to ensure that federal reports are prepared and reviewed timely.
Auditee’s comments and response – IPTF hired a new contract accountant, who is responsible for ensuring that the accounting records are prepared accurately and to ensure that these required reports are submitted on time.
Responsible party for corrective action – Sharon Day, Executive Director
Repeat finding – 2022-003
2023-003: Filing of Federal Reports SF-425
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612
Compliance and Internal Controls Significant Deficiency
Category of Finding – Reporting
Criteria – IPTF is required to submit Federal Financial Reports (SF-425) semi-annually within 30 days of period end.
Condition – The September 30, 2022 and March 30, 2023 SF-425 reports were filed on March 2, 2023 and May 1, 2023, outside the 30 day filing requirement.
Cause – IPTF had turnover in the contract accountant. After taking over, the new contract accountant was not aware of their responsibility for these federal reporting requirements.
Effect – Failure to submit reports within the required period may result in IPTF’s status to be delinquent and not be able to draw down funds on the award.
Recommendation – We recommend that management implement a formal process that clearly defines who is responsible for preparing these reports and to ensure that federal reports are prepared and reviewed timely.
Auditee’s comments and response – IPTF hired a new contract accountant, who is responsible for ensuring that the accounting records are prepared accurately and to ensure that these required reports are submitted on time.
Responsible party for corrective action – Sharon Day, Executive Director
Repeat finding – 2022-003
2023-002: Maintaining Invoices
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.939
Compliance and Internal Controls Material Weakness
Category of Finding – Allowable Costs/ Cost Principles
Criteria – Internal control procedures should ensure that approved invoices are maintained as documentation of allowable costs.
Condition – IPTF has an internal control process designed to obtain and maintain approved invoices for allowable costs, but the controls did not operate as designed.
Cause – IPTF faced turnover in the contract accountant position during the fiscal year. A disbursement paid around the time of this transition was missing proper supporting documentation.
Effect – Unallowable expenses could be paid by the program or expenses could be paid multiple times by accident.
Context – A nonstatistical sample of 20 transactions were selected for testing. The supporting invoice for one transaction could not be provided.
Recommendation – We recommend the procedures related to obtaining and maintaining proper documentation be reviewed with applicable employees to ensure that required documentation is maintained.
Auditee’s comments and response – IPTF hired a new contract accountant and began using bill.com to store documentation supporting all costs and to ensure the related approvals are maintained.
Responsible party for corrective action – Sharon Day, Executive Director
Repeat finding – No
2023-001: Overspent Grant
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.243
Compliance and Internal Controls Material Weakness
Category of Finding – Cash Management
Criteria – 2 CFR § 200.302(b), requires entities to have written policies and procedures to accurately track grant accounting. Per the grant agreement, the grant must be earned on a reimbursement basis, which requires eligible expenditures to be incurred in order to earn the grant revenue.
Condition – During fiscal year 2023, IPTF recorded $5,821 more revenue on the SAMSHA grant than the related eligible expenditures.
Cause – IPTF had turnover in the contract accounting function/position. Multiple adjustments were made in the accounting software by the former contract accounting prior to the transition, which were difficult to trace back to and ultimately, actual costs incurred under the grant were miscalculated and overstated.
Effect – As a result of this condition, IPTF was noncompliant with the grant and recognized more revenue than allowed based on eligible costs.
Questioned Costs – $5,821
Recommendation – We recommend that management ensure internal financials are reviewed on a monthly basis to ensure completeness and accuracy, which includes having grant specific financials reviewed by the program managers. Also, we recommend contacting the grantor to discuss the need to repay the $5,821.
Auditee’s comments and response – IPTF hired a new contract accountant in October 2022 and have since implemented processes to ensure accurate internal financial statements are prepared and reviewed by program managers on a monthly basis as required by their written financial policies.
Responsible party for corrective action – Sharon Day, Executive Director
Repeat finding – No
2023-004: Lack of Payroll Documentation
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612 and 93.939
Internal Controls Significant Deficiency
Category of Finding – Allowable Costs/ Cost Principles
Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition – During our audit, we noticed multiple employees' approved pay rates were not retained or did not agree with the actual amount paid and recorded in accounting system.
Cause – Procedure in place was not followed to ensure that all wage rates get approvals and are documented in employee personnel files.
Effect – Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Salaries or wages may be overcharged or undercharged to grant if pay rates are not documented.
Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Employee’s actual pay rate did not agree or was not supported by approved pay rate for 19 transactions.
Recommendation – We recommend the management review personnel files to ensure all required documentation is retained and accurate. We also recommend management review and update policies and procedures to ensure responsibilities are clear and future files are complete.
Auditee’s comments and response – Management will review policies and procedures to ensure information is complete and up-to-date.
Responsible party for corrective action: Sharon Day, Executive Director
Repeat finding – No
2023-004: Lack of Payroll Documentation
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612 and 93.939
Internal Controls Significant Deficiency
Category of Finding – Allowable Costs/ Cost Principles
Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition – During our audit, we noticed multiple employees' approved pay rates were not retained or did not agree with the actual amount paid and recorded in accounting system.
Cause – Procedure in place was not followed to ensure that all wage rates get approvals and are documented in employee personnel files.
Effect – Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Salaries or wages may be overcharged or undercharged to grant if pay rates are not documented.
Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Employee’s actual pay rate did not agree or was not supported by approved pay rate for 19 transactions.
Recommendation – We recommend the management review personnel files to ensure all required documentation is retained and accurate. We also recommend management review and update policies and procedures to ensure responsibilities are clear and future files are complete.
Auditee’s comments and response – Management will review policies and procedures to ensure information is complete and up-to-date.
Responsible party for corrective action: Sharon Day, Executive Director
Repeat finding – No
2023-004: Lack of Payroll Documentation
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612 and 93.939
Internal Controls Significant Deficiency
Category of Finding – Allowable Costs/ Cost Principles
Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition – During our audit, we noticed multiple employees' approved pay rates were not retained or did not agree with the actual amount paid and recorded in accounting system.
Cause – Procedure in place was not followed to ensure that all wage rates get approvals and are documented in employee personnel files.
Effect – Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Salaries or wages may be overcharged or undercharged to grant if pay rates are not documented.
Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Employee’s actual pay rate did not agree or was not supported by approved pay rate for 19 transactions.
Recommendation – We recommend the management review personnel files to ensure all required documentation is retained and accurate. We also recommend management review and update policies and procedures to ensure responsibilities are clear and future files are complete.
Auditee’s comments and response – Management will review policies and procedures to ensure information is complete and up-to-date.
Responsible party for corrective action: Sharon Day, Executive Director
Repeat finding – No
2023-005: Payroll Timecard Approval
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612 and 93.939
Compliance and Internal Controls Significant Deficiency
Category of Finding – Allowable Costs/ Cost Principles
Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition – During testing, we noticed multiple timecards not approved by the responsible individual so the required supervisors’ review of the timecard for accurate hours and allocations did not occur and was not documented.
Cause – Controls in place did not operate as designed so hours charged to the grant were not properly reviewed for accuracy by responsible individuals.
Effect – Salaries or wages may be overcharged or undercharged to grant if program allocation is not documented. If the granting agency ever questioned costs, IPTF may not be able to prove that all the funds requested for reimbursement from the agency were for activities allowed under the grant.
Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Timecard approval was missing or performed by an unauthorized individual for 7 transactions.
Recommendation – We recommend the management implement and enforce a review process to ensure all timecards are reviewed by responsible individual.
Auditee’s comments and response – Management will review policies and procedures to ensure all timecards are reviewed by responsible individual.
Responsible party for corrective action: Sharon Day, Executive Director
Repeat finding – No
2023-005: Payroll Timecard Approval
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612 and 93.939
Compliance and Internal Controls Significant Deficiency
Category of Finding – Allowable Costs/ Cost Principles
Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition – During testing, we noticed multiple timecards not approved by the responsible individual so the required supervisors’ review of the timecard for accurate hours and allocations did not occur and was not documented.
Cause – Controls in place did not operate as designed so hours charged to the grant were not properly reviewed for accuracy by responsible individuals.
Effect – Salaries or wages may be overcharged or undercharged to grant if program allocation is not documented. If the granting agency ever questioned costs, IPTF may not be able to prove that all the funds requested for reimbursement from the agency were for activities allowed under the grant.
Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Timecard approval was missing or performed by an unauthorized individual for 7 transactions.
Recommendation – We recommend the management implement and enforce a review process to ensure all timecards are reviewed by responsible individual.
Auditee’s comments and response – Management will review policies and procedures to ensure all timecards are reviewed by responsible individual.
Responsible party for corrective action: Sharon Day, Executive Director
Repeat finding – No
2023-005: Payroll Timecard Approval
Federal Departments: Department of Health and Human Services
Assistance Listing #: 93.612 and 93.939
Compliance and Internal Controls Significant Deficiency
Category of Finding – Allowable Costs/ Cost Principles
Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition – During testing, we noticed multiple timecards not approved by the responsible individual so the required supervisors’ review of the timecard for accurate hours and allocations did not occur and was not documented.
Cause – Controls in place did not operate as designed so hours charged to the grant were not properly reviewed for accuracy by responsible individuals.
Effect – Salaries or wages may be overcharged or undercharged to grant if program allocation is not documented. If the granting agency ever questioned costs, IPTF may not be able to prove that all the funds requested for reimbursement from the agency were for activities allowed under the grant.
Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Timecard approval was missing or performed by an unauthorized individual for 7 transactions.
Recommendation – We recommend the management implement and enforce a review process to ensure all timecards are reviewed by responsible individual.
Auditee’s comments and response – Management will review policies and procedures to ensure all timecards are reviewed by responsible individual.
Responsible party for corrective action: Sharon Day, Executive Director
Repeat finding – No