Audit 301014

(2022-003) Allowable Costs Federal Agency: U.S. Department of Treasury CFDA No.: 21.027 Federal Program: Coronavirus State and Local Fiscal Recovery Funds Federal Award Year: 2022 Control Category: Allowable Costs Questioned Costs: $118,513 Condition The Center charged payroll expenses to the program based an allocation and did not adjust the charges to reconcile to actual time documents per employee timesheets. Criteria 2 CFR 200.430(i), Standards for Documentation of Personnel Expenses, states, in part: “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed…” Charges must “support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award;…” And “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Cause The Center's calculation of payroll charged to the grant is not reconciled to the actual hours reported by the employee on their individual timesheet. Effect Payroll costs charged to the program were greater than amounts supported by the documentation Questioned Costs There were questioned costs in the amount of $19,688 for the sample selected, which was extrapolated to $118,513 when the error rate was applied to the personnel costs not tested. Recommendation We recommend that the Center charge time to the program based on actual hours worked per the employees' timesheets. Management Response Personnel costs will be charged to the program based on actual time recorded in the organization’s case management software. Hours will be audited quarterly to ensure accuracy and completeness. The Center notes that the grantor, the State Bar of California, never requested the Center to charge payroll expenses to the program based on actual time documents, nor had they ever noted this discrepancy during their periodic audits of the program.

(2022-004) Allowable Costs and Procurement Federal Agency: U.S. Department of Treasury CFDA No.: 21.027 Federal Program: Coronavirus State and Local Fiscal Recovery Funds Federal Award Year: 2022 Control Category: Allowable Costs and Procurement, Suspension and Debarment Questioned Costs: $804.05 Condition The Center did not retain evidence of competitive bidding or evidence of verifying suspension and debarment for the two contracts selected for testing. Additionally, the Center did not retain invoice support and documentation of approval for two disbursements selected for testing. Criteria 2 CFR 200.403 Factors Affecting Allowability of Costs, states, in part that costs “be adequately documented”. 2 CFR 200.320 Methods of Procurement includes several required procurement procedures including competitive bidding and verification that vendors re not suspended or debarred from working with the federal government. Cause The Center did not retain evidence of bidding, suspension and debarment, or invoice documentation for certain purchases. Effect We are unable to determine if the costs are allowable in accordance with the Uniform Guidance. Management Response The Center will retain evidence of competitive bidding, unless an emergency or other situation precluding the delay of competitive bidding has arisen (in which case, the Center will retain the evidence and rationale justifying the sole source contract). The Center will retain verification of suspension and debarment for all potential contract service providers. The Center notes that one of the contracts selected for testing arose during an emergency situation (flooding). CFO will ensure that all invoices and supporting documentation are retained. ED and/or Director of Legal Services(depending on amount of expenditure, both may be required) will approve electronic payments inBill.com. Approval of expenses paid with paper checks will be indicated by signature of checks after reviewing accompanying support.

(2022-003) Allowable Costs Federal Agency: U.S. Department of Treasury CFDA No.: 21.027 Federal Program: Coronavirus State and Local Fiscal Recovery Funds Federal Award Year: 2022 Control Category: Allowable Costs Questioned Costs: $118,513 Condition The Center charged payroll expenses to the program based an allocation and did not adjust the charges to reconcile to actual time documents per employee timesheets. Criteria 2 CFR 200.430(i), Standards for Documentation of Personnel Expenses, states, in part: “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed…” Charges must “support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award;…” And “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Cause The Center's calculation of payroll charged to the grant is not reconciled to the actual hours reported by the employee on their individual timesheet. Effect Payroll costs charged to the program were greater than amounts supported by the documentation Questioned Costs There were questioned costs in the amount of $19,688 for the sample selected, which was extrapolated to $118,513 when the error rate was applied to the personnel costs not tested. Recommendation We recommend that the Center charge time to the program based on actual hours worked per the employees' timesheets. Management Response Personnel costs will be charged to the program based on actual time recorded in the organization’s case management software. Hours will be audited quarterly to ensure accuracy and completeness. The Center notes that the grantor, the State Bar of California, never requested the Center to charge payroll expenses to the program based on actual time documents, nor had they ever noted this discrepancy during their periodic audits of the program.

(2022-004) Allowable Costs and Procurement Federal Agency: U.S. Department of Treasury CFDA No.: 21.027 Federal Program: Coronavirus State and Local Fiscal Recovery Funds Federal Award Year: 2022 Control Category: Allowable Costs and Procurement, Suspension and Debarment Questioned Costs: $804.05 Condition The Center did not retain evidence of competitive bidding or evidence of verifying suspension and debarment for the two contracts selected for testing. Additionally, the Center did not retain invoice support and documentation of approval for two disbursements selected for testing. Criteria 2 CFR 200.403 Factors Affecting Allowability of Costs, states, in part that costs “be adequately documented”. 2 CFR 200.320 Methods of Procurement includes several required procurement procedures including competitive bidding and verification that vendors re not suspended or debarred from working with the federal government. Cause The Center did not retain evidence of bidding, suspension and debarment, or invoice documentation for certain purchases. Effect We are unable to determine if the costs are allowable in accordance with the Uniform Guidance. Management Response The Center will retain evidence of competitive bidding, unless an emergency or other situation precluding the delay of competitive bidding has arisen (in which case, the Center will retain the evidence and rationale justifying the sole source contract). The Center will retain verification of suspension and debarment for all potential contract service providers. The Center notes that one of the contracts selected for testing arose during an emergency situation (flooding). CFO will ensure that all invoices and supporting documentation are retained. ED and/or Director of Legal Services(depending on amount of expenditure, both may be required) will approve electronic payments inBill.com. Approval of expenses paid with paper checks will be indicated by signature of checks after reviewing accompanying support.

(2022-003) Allowable Costs Federal Agency: U.S. Department of Treasury CFDA No.: 21.027 Federal Program: Coronavirus State and Local Fiscal Recovery Funds Federal Award Year: 2022 Control Category: Allowable Costs Questioned Costs: $118,513 Condition The Center charged payroll expenses to the program based an allocation and did not adjust the charges to reconcile to actual time documents per employee timesheets. Criteria 2 CFR 200.430(i), Standards for Documentation of Personnel Expenses, states, in part: “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed…” Charges must “support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award;…” And “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Cause The Center's calculation of payroll charged to the grant is not reconciled to the actual hours reported by the employee on their individual timesheet. Effect Payroll costs charged to the program were greater than amounts supported by the documentation Questioned Costs There were questioned costs in the amount of $19,688 for the sample selected, which was extrapolated to $118,513 when the error rate was applied to the personnel costs not tested. Recommendation We recommend that the Center charge time to the program based on actual hours worked per the employees' timesheets. Management Response Personnel costs will be charged to the program based on actual time recorded in the organization’s case management software. Hours will be audited quarterly to ensure accuracy and completeness. The Center notes that the grantor, the State Bar of California, never requested the Center to charge payroll expenses to the program based on actual time documents, nor had they ever noted this discrepancy during their periodic audits of the program.

(2022-004) Allowable Costs and Procurement Federal Agency: U.S. Department of Treasury CFDA No.: 21.027 Federal Program: Coronavirus State and Local Fiscal Recovery Funds Federal Award Year: 2022 Control Category: Allowable Costs and Procurement, Suspension and Debarment Questioned Costs: $804.05 Condition The Center did not retain evidence of competitive bidding or evidence of verifying suspension and debarment for the two contracts selected for testing. Additionally, the Center did not retain invoice support and documentation of approval for two disbursements selected for testing. Criteria 2 CFR 200.403 Factors Affecting Allowability of Costs, states, in part that costs “be adequately documented”. 2 CFR 200.320 Methods of Procurement includes several required procurement procedures including competitive bidding and verification that vendors re not suspended or debarred from working with the federal government. Cause The Center did not retain evidence of bidding, suspension and debarment, or invoice documentation for certain purchases. Effect We are unable to determine if the costs are allowable in accordance with the Uniform Guidance. Management Response The Center will retain evidence of competitive bidding, unless an emergency or other situation precluding the delay of competitive bidding has arisen (in which case, the Center will retain the evidence and rationale justifying the sole source contract). The Center will retain verification of suspension and debarment for all potential contract service providers. The Center notes that one of the contracts selected for testing arose during an emergency situation (flooding). CFO will ensure that all invoices and supporting documentation are retained. ED and/or Director of Legal Services(depending on amount of expenditure, both may be required) will approve electronic payments inBill.com. Approval of expenses paid with paper checks will be indicated by signature of checks after reviewing accompanying support.

(2022-003) Allowable Costs Federal Agency: U.S. Department of Treasury CFDA No.: 21.027 Federal Program: Coronavirus State and Local Fiscal Recovery Funds Federal Award Year: 2022 Control Category: Allowable Costs Questioned Costs: $118,513 Condition The Center charged payroll expenses to the program based an allocation and did not adjust the charges to reconcile to actual time documents per employee timesheets. Criteria 2 CFR 200.430(i), Standards for Documentation of Personnel Expenses, states, in part: “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed…” Charges must “support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award;…” And “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Cause The Center's calculation of payroll charged to the grant is not reconciled to the actual hours reported by the employee on their individual timesheet. Effect Payroll costs charged to the program were greater than amounts supported by the documentation Questioned Costs There were questioned costs in the amount of $19,688 for the sample selected, which was extrapolated to $118,513 when the error rate was applied to the personnel costs not tested. Recommendation We recommend that the Center charge time to the program based on actual hours worked per the employees' timesheets. Management Response Personnel costs will be charged to the program based on actual time recorded in the organization’s case management software. Hours will be audited quarterly to ensure accuracy and completeness. The Center notes that the grantor, the State Bar of California, never requested the Center to charge payroll expenses to the program based on actual time documents, nor had they ever noted this discrepancy during their periodic audits of the program.

(2022-004) Allowable Costs and Procurement Federal Agency: U.S. Department of Treasury CFDA No.: 21.027 Federal Program: Coronavirus State and Local Fiscal Recovery Funds Federal Award Year: 2022 Control Category: Allowable Costs and Procurement, Suspension and Debarment Questioned Costs: $804.05 Condition The Center did not retain evidence of competitive bidding or evidence of verifying suspension and debarment for the two contracts selected for testing. Additionally, the Center did not retain invoice support and documentation of approval for two disbursements selected for testing. Criteria 2 CFR 200.403 Factors Affecting Allowability of Costs, states, in part that costs “be adequately documented”. 2 CFR 200.320 Methods of Procurement includes several required procurement procedures including competitive bidding and verification that vendors re not suspended or debarred from working with the federal government. Cause The Center did not retain evidence of bidding, suspension and debarment, or invoice documentation for certain purchases. Effect We are unable to determine if the costs are allowable in accordance with the Uniform Guidance. Management Response The Center will retain evidence of competitive bidding, unless an emergency or other situation precluding the delay of competitive bidding has arisen (in which case, the Center will retain the evidence and rationale justifying the sole source contract). The Center will retain verification of suspension and debarment for all potential contract service providers. The Center notes that one of the contracts selected for testing arose during an emergency situation (flooding). CFO will ensure that all invoices and supporting documentation are retained. ED and/or Director of Legal Services(depending on amount of expenditure, both may be required) will approve electronic payments inBill.com. Approval of expenses paid with paper checks will be indicated by signature of checks after reviewing accompanying support.