Audit 300727

FY End
2023-06-30
Total Expended
$2.78M
Findings
16
Programs
3
Year: 2023 Accepted: 2024-03-29

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
389843 2023-003 Material Weakness Yes B
389844 2023-004 Material Weakness Yes B
389845 2023-003 Material Weakness Yes B
389846 2023-004 Material Weakness Yes B
389847 2023-003 Material Weakness Yes B
389848 2023-004 Material Weakness Yes B
389849 2023-003 Material Weakness Yes B
389850 2023-004 Material Weakness Yes B
966285 2023-003 Material Weakness Yes B
966286 2023-004 Material Weakness Yes B
966287 2023-003 Material Weakness Yes B
966288 2023-004 Material Weakness Yes B
966289 2023-003 Material Weakness Yes B
966290 2023-004 Material Weakness Yes B
966291 2023-003 Material Weakness Yes B
966292 2023-004 Material Weakness Yes B

Programs

ALN Program Spent Major Findings
17.259 Wia Youth Activities $532,013 Yes 2
14.218 Community Development Block Grants/entitlement Grants $63,235 - 0
93.569 Community Services Block Grant $29,537 - 0

Contacts

Name Title Type
FKH4JKWKKSG1 Jason T Redman Auditee
5857949802 Jason Redman Auditor
No contacts on file

Notes to SEFA

Title: Note A Accounting Policies: See form tab De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10 percent de minimus indirect cost rate allowed under the Uniform Guidance. The above schedule of expenditures of federal awards (the “schedule”) includes the federal grant activity of Opportunities for a Better Tomorrow, Inc. (the “Organization’) and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements.
Title: Note B Accounting Policies: See form tab De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10 percent de minimus indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Finding Details

Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing for the year ended June 30, 2023, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $65,379 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $65,379. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. Repeat finding: Yes, 2022-003. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200 Subpart E of the Uniform Guidance states that costs charged to federal awards must be determined in accordance with GAAP, be adequately documented, and be allocable to the federal award, and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of 42 disbursements for the year ended June 30, 2023, we noted that there were 22 instances where there was a lack of adequate documentation or the amount allocated to the major program could not be substantiated. Cause: With personnel changes at most levels within the Organization, documentation from the former employees could not be located and the current employees were unfamiliar with the requirements of the federal awards. Effect or Potential Effect: Due to the lack of internal controls in this area, support for various expenditures were not able to be located which could lead to costs being allocated improperly to the federal grants. Questioned Costs: $338,554. Context: In our testing sample, approximately 32% of total expenditures tested did not have proper documentation or the allocation to the federal award could not be provided. The potential error was extrapolated to the population leading to questioned costs of $338,554. Recommendation: We recommend the Organization implement proper internal controls over compliance with allowable cost principles, including maintaining support for allocation methodologies used and costs incurred, and to ensure costs relate to the federal program to which they are charged. Repeat finding: Yes, 2022-004. View of Responsible Officials: The Organization concurs with the finding and the related recommendation. The Organization has implemented procedures to improve document retention and support for allocations to the federal grant during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing for the year ended June 30, 2023, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $65,379 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $65,379. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. Repeat finding: Yes, 2022-003. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200 Subpart E of the Uniform Guidance states that costs charged to federal awards must be determined in accordance with GAAP, be adequately documented, and be allocable to the federal award, and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of 42 disbursements for the year ended June 30, 2023, we noted that there were 22 instances where there was a lack of adequate documentation or the amount allocated to the major program could not be substantiated. Cause: With personnel changes at most levels within the Organization, documentation from the former employees could not be located and the current employees were unfamiliar with the requirements of the federal awards. Effect or Potential Effect: Due to the lack of internal controls in this area, support for various expenditures were not able to be located which could lead to costs being allocated improperly to the federal grants. Questioned Costs: $338,554. Context: In our testing sample, approximately 32% of total expenditures tested did not have proper documentation or the allocation to the federal award could not be provided. The potential error was extrapolated to the population leading to questioned costs of $338,554. Recommendation: We recommend the Organization implement proper internal controls over compliance with allowable cost principles, including maintaining support for allocation methodologies used and costs incurred, and to ensure costs relate to the federal program to which they are charged. Repeat finding: Yes, 2022-004. View of Responsible Officials: The Organization concurs with the finding and the related recommendation. The Organization has implemented procedures to improve document retention and support for allocations to the federal grant during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing for the year ended June 30, 2023, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $65,379 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $65,379. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. Repeat finding: Yes, 2022-003. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200 Subpart E of the Uniform Guidance states that costs charged to federal awards must be determined in accordance with GAAP, be adequately documented, and be allocable to the federal award, and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of 42 disbursements for the year ended June 30, 2023, we noted that there were 22 instances where there was a lack of adequate documentation or the amount allocated to the major program could not be substantiated. Cause: With personnel changes at most levels within the Organization, documentation from the former employees could not be located and the current employees were unfamiliar with the requirements of the federal awards. Effect or Potential Effect: Due to the lack of internal controls in this area, support for various expenditures were not able to be located which could lead to costs being allocated improperly to the federal grants. Questioned Costs: $338,554. Context: In our testing sample, approximately 32% of total expenditures tested did not have proper documentation or the allocation to the federal award could not be provided. The potential error was extrapolated to the population leading to questioned costs of $338,554. Recommendation: We recommend the Organization implement proper internal controls over compliance with allowable cost principles, including maintaining support for allocation methodologies used and costs incurred, and to ensure costs relate to the federal program to which they are charged. Repeat finding: Yes, 2022-004. View of Responsible Officials: The Organization concurs with the finding and the related recommendation. The Organization has implemented procedures to improve document retention and support for allocations to the federal grant during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing for the year ended June 30, 2023, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $65,379 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $65,379. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. Repeat finding: Yes, 2022-003. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200 Subpart E of the Uniform Guidance states that costs charged to federal awards must be determined in accordance with GAAP, be adequately documented, and be allocable to the federal award, and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of 42 disbursements for the year ended June 30, 2023, we noted that there were 22 instances where there was a lack of adequate documentation or the amount allocated to the major program could not be substantiated. Cause: With personnel changes at most levels within the Organization, documentation from the former employees could not be located and the current employees were unfamiliar with the requirements of the federal awards. Effect or Potential Effect: Due to the lack of internal controls in this area, support for various expenditures were not able to be located which could lead to costs being allocated improperly to the federal grants. Questioned Costs: $338,554. Context: In our testing sample, approximately 32% of total expenditures tested did not have proper documentation or the allocation to the federal award could not be provided. The potential error was extrapolated to the population leading to questioned costs of $338,554. Recommendation: We recommend the Organization implement proper internal controls over compliance with allowable cost principles, including maintaining support for allocation methodologies used and costs incurred, and to ensure costs relate to the federal program to which they are charged. Repeat finding: Yes, 2022-004. View of Responsible Officials: The Organization concurs with the finding and the related recommendation. The Organization has implemented procedures to improve document retention and support for allocations to the federal grant during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing for the year ended June 30, 2023, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $65,379 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $65,379. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. Repeat finding: Yes, 2022-003. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200 Subpart E of the Uniform Guidance states that costs charged to federal awards must be determined in accordance with GAAP, be adequately documented, and be allocable to the federal award, and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of 42 disbursements for the year ended June 30, 2023, we noted that there were 22 instances where there was a lack of adequate documentation or the amount allocated to the major program could not be substantiated. Cause: With personnel changes at most levels within the Organization, documentation from the former employees could not be located and the current employees were unfamiliar with the requirements of the federal awards. Effect or Potential Effect: Due to the lack of internal controls in this area, support for various expenditures were not able to be located which could lead to costs being allocated improperly to the federal grants. Questioned Costs: $338,554. Context: In our testing sample, approximately 32% of total expenditures tested did not have proper documentation or the allocation to the federal award could not be provided. The potential error was extrapolated to the population leading to questioned costs of $338,554. Recommendation: We recommend the Organization implement proper internal controls over compliance with allowable cost principles, including maintaining support for allocation methodologies used and costs incurred, and to ensure costs relate to the federal program to which they are charged. Repeat finding: Yes, 2022-004. View of Responsible Officials: The Organization concurs with the finding and the related recommendation. The Organization has implemented procedures to improve document retention and support for allocations to the federal grant during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing for the year ended June 30, 2023, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $65,379 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $65,379. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. Repeat finding: Yes, 2022-003. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200 Subpart E of the Uniform Guidance states that costs charged to federal awards must be determined in accordance with GAAP, be adequately documented, and be allocable to the federal award, and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of 42 disbursements for the year ended June 30, 2023, we noted that there were 22 instances where there was a lack of adequate documentation or the amount allocated to the major program could not be substantiated. Cause: With personnel changes at most levels within the Organization, documentation from the former employees could not be located and the current employees were unfamiliar with the requirements of the federal awards. Effect or Potential Effect: Due to the lack of internal controls in this area, support for various expenditures were not able to be located which could lead to costs being allocated improperly to the federal grants. Questioned Costs: $338,554. Context: In our testing sample, approximately 32% of total expenditures tested did not have proper documentation or the allocation to the federal award could not be provided. The potential error was extrapolated to the population leading to questioned costs of $338,554. Recommendation: We recommend the Organization implement proper internal controls over compliance with allowable cost principles, including maintaining support for allocation methodologies used and costs incurred, and to ensure costs relate to the federal program to which they are charged. Repeat finding: Yes, 2022-004. View of Responsible Officials: The Organization concurs with the finding and the related recommendation. The Organization has implemented procedures to improve document retention and support for allocations to the federal grant during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing for the year ended June 30, 2023, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $65,379 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $65,379. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. Repeat finding: Yes, 2022-003. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200 Subpart E of the Uniform Guidance states that costs charged to federal awards must be determined in accordance with GAAP, be adequately documented, and be allocable to the federal award, and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of 42 disbursements for the year ended June 30, 2023, we noted that there were 22 instances where there was a lack of adequate documentation or the amount allocated to the major program could not be substantiated. Cause: With personnel changes at most levels within the Organization, documentation from the former employees could not be located and the current employees were unfamiliar with the requirements of the federal awards. Effect or Potential Effect: Due to the lack of internal controls in this area, support for various expenditures were not able to be located which could lead to costs being allocated improperly to the federal grants. Questioned Costs: $338,554. Context: In our testing sample, approximately 32% of total expenditures tested did not have proper documentation or the allocation to the federal award could not be provided. The potential error was extrapolated to the population leading to questioned costs of $338,554. Recommendation: We recommend the Organization implement proper internal controls over compliance with allowable cost principles, including maintaining support for allocation methodologies used and costs incurred, and to ensure costs relate to the federal program to which they are charged. Repeat finding: Yes, 2022-004. View of Responsible Officials: The Organization concurs with the finding and the related recommendation. The Organization has implemented procedures to improve document retention and support for allocations to the federal grant during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing for the year ended June 30, 2023, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $65,379 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $65,379. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. Repeat finding: Yes, 2022-003. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200 Subpart E of the Uniform Guidance states that costs charged to federal awards must be determined in accordance with GAAP, be adequately documented, and be allocable to the federal award, and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of 42 disbursements for the year ended June 30, 2023, we noted that there were 22 instances where there was a lack of adequate documentation or the amount allocated to the major program could not be substantiated. Cause: With personnel changes at most levels within the Organization, documentation from the former employees could not be located and the current employees were unfamiliar with the requirements of the federal awards. Effect or Potential Effect: Due to the lack of internal controls in this area, support for various expenditures were not able to be located which could lead to costs being allocated improperly to the federal grants. Questioned Costs: $338,554. Context: In our testing sample, approximately 32% of total expenditures tested did not have proper documentation or the allocation to the federal award could not be provided. The potential error was extrapolated to the population leading to questioned costs of $338,554. Recommendation: We recommend the Organization implement proper internal controls over compliance with allowable cost principles, including maintaining support for allocation methodologies used and costs incurred, and to ensure costs relate to the federal program to which they are charged. Repeat finding: Yes, 2022-004. View of Responsible Officials: The Organization concurs with the finding and the related recommendation. The Organization has implemented procedures to improve document retention and support for allocations to the federal grant during the year ending June 30, 2024.