Finding 2022-003: Time Tracking and Payroll Allocations
Information on the Federal Programs: Assistance Listing Number 98.001
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 430 “Compensation – personal services” requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, these records must comply with established accounting policies and practices of the non-Federal entity.
Condition: During our internal control testwork over payroll, we noted employee timesheets were completed based on time incurred by class (project) codes however, the amounts recorded in the general ledger did not agree to the timesheet allocations. Management recorded the allocations based on donors’ budgets and/or management's estimates.
Cause: Astraea charges time incurred based on donors' budgets and/or management's estimates.
Context: Astraea’s time-recording system does not capture the actual level of effort per program. The issue is deemed to be systemic in nature.
Effect: The current system does not allow Astraea to accurately track and charge salaries and wages to its various programs. As a result, Astraea could inadvertently mischarge salaries and wages to those programs.
Questioned Costs: Undetermined.
Identification as a Repeat Finding: Yes - Finding 2021-004.
Recommendation: We recommend Astraea ensure each employee completes a timesheet that pertains to each payroll period and the timesheet documents the allocation of time worked on departments and projects. Furthermore, the finance department should prepare and maintain a reconciliation between the program allocations (as documented in the approved timesheets) and the general ledger in order to ensure a full and accurate audit trail of payroll expenditures.
Finding 2022-004: Subrecipient Management and Monitoring
Information on the Federal Programs: Assistance Listing Number 98.001
Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient.
Condition: Astraea has a subaward policy, which requires a risk assessment form be completed for each potential subrecipient. However, this step was not completed for all of the subrecipients in which Astraea engaged with during the fiscal year.
Cause: Astraea did not adhere to its policy in regards to risk assessment procedures.
Context: Astraea failed to perform risk assessment procedures. Our audit work in this area consisted of substantive testwork over a sample of subrecipient expenditures that were selected based on a defined threshold. We consider our sample to be representative of the populations, and thus, is a statistically valid sample. The issue is deemed to be systemic.
Effect: Astraea could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight (i.e. monitoring) to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward.
Questioned Costs: None noted.
Identification as a Repeat Finding: Yes - Finding 2021-005.
Recommendation: We recommend Astraea adhere to its current subaward policy and ensure the risk assessment procedures over all of its subrecipients are performed and documented prior to engagement. Based on these risk assessments, Astraea should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend Astraea require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately.
Finding 2022-005: Procurement
Information on the Federal Programs: Assistance Listing Number 98.001
Criteria: CFR 200.318 states that non-Federal entities must have and use documented procurement procedures consistent with the requirements for procurement regulations included in paragraphs 318 through 327.
Condition: Astraea's procurement policy references CFR 200.318-327 however the policy does not note how it will comply with the requirements and what the process is to ensure compliance is achieved. During our audit we noted multiple instances where vendors were engaged without any documentation of procurement process or justification to support using a noncompetitive procurement process in accordance with CFR 200.320(c).
Cause: Astraea does not have a procedure in place to ensure all vendors or suppliers paid with Federal funding are engaged in compliance with the Federal regulations.
Context: Without updating the policy to comply with CFR 200, Astraea is at risk of entering into contracts for goods or services under Federal awards that were not adequately procured based on the regulations in the Uniform Guidance and the awarding agency or pass-through entity could disallow the costs paid for the goods or services.
Effect: Astraea may have disallowed costs for not properly procuring goods or services.
Questioned Costs: None noted.
Identification as a Repeat Finding: Yes - 2021-006.
Recommendation: We recommend Astraea update the procurement policy to become compliant with CFR 200. We further recommend it ensure all staff are properly trained with respect to the new policy to ensure compliance.
Finding 2022-006: Suspension and Debarment and U.S. Government Regulations on Terrorism
Information on the Federal Programs: Assistance Listing Number 98.001
Criteria: CFR 200.213 states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; or (b) collecting a certification from that person; or (c) adding a clause or condition to the covered transaction with that person. Additionally, as outlined in each Department of State award, recipients of U.S. Government funds must adhere to the United States Government’s requirements on screening all potential vendors, suppliers, sub-contractors/grantees and employees against the United States Department of State’s Terrorism watch list. The screening of all potential vendors, suppliers, subcontractors/ grantees and employees must be documented in writing.
Condition: Astraea did not provide documentation to support its screenings for its potential and current vendors, suppliers, contractors, employees, etc. that were paid with Federal funds.
Cause: Astraea did not have a procedure in place to ensure all required screenings are performed and documentation to support the screening is maintained.
Context: During our audit, we inquired of evidence of such a process, and Astraea was unable to provide support with respect to this area. It should be noted, that Astraea did perform and document the required screenings in January 2023 (in response to the finding issued during the fiscal year 2021 audit finding).
Effect: Astraea could make payments to an entity or individual that has been debarred or suspended by the US Government; such costs would be disallowed, and Astraea could face consequences for lack of compliance.
Questioned Costs: None noted.
Identification as a Repeat Finding: Yes - Finding 2021-007.
Recommendation: We recommend Astraea develop a policy of how screenings will be performed and how documentation will be maintained in order to demonstrate compliance with government regulations. We further recommend it ensure all staff are properly trained with respect to the new policy to ensure compliance.
Finding 2022-007: Unallowable Costs / Cash Management
Criteria: As stated in 2 CFR 200.303, the non-Federal entity (i.e. the Organization) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition: Astraea charged unallowed overhead costs to a Federal grant. These unallowable expenses were charged to the Federal government and cash was collected by Astraea.
Cause: Astraea did not have a procedure in place to ensure all expenses charged to the Federal grants were allowable.
Context: During the audit, we noted Astaea's internal control processes were not effective, evidenced by the recording and billing of unallowable overhead costs.
Effect: Unallowable costs were billed to the Federal Government.
Questioned Costs: None noted. These unallowable costs were moved to refundable advance.
Identification as a Repeat Finding: No
Recommendation: We recommend Astraea develop a more stringent internal control process surrounding the review and approval process for expenses recorded to Federal projects.
Finding 2022-003: Time Tracking and Payroll Allocations
Information on the Federal Programs: Assistance Listing Number 98.001
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 430 “Compensation – personal services” requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, these records must comply with established accounting policies and practices of the non-Federal entity.
Condition: During our internal control testwork over payroll, we noted employee timesheets were completed based on time incurred by class (project) codes however, the amounts recorded in the general ledger did not agree to the timesheet allocations. Management recorded the allocations based on donors’ budgets and/or management's estimates.
Cause: Astraea charges time incurred based on donors' budgets and/or management's estimates.
Context: Astraea’s time-recording system does not capture the actual level of effort per program. The issue is deemed to be systemic in nature.
Effect: The current system does not allow Astraea to accurately track and charge salaries and wages to its various programs. As a result, Astraea could inadvertently mischarge salaries and wages to those programs.
Questioned Costs: Undetermined.
Identification as a Repeat Finding: Yes - Finding 2021-004.
Recommendation: We recommend Astraea ensure each employee completes a timesheet that pertains to each payroll period and the timesheet documents the allocation of time worked on departments and projects. Furthermore, the finance department should prepare and maintain a reconciliation between the program allocations (as documented in the approved timesheets) and the general ledger in order to ensure a full and accurate audit trail of payroll expenditures.
Finding 2022-004: Subrecipient Management and Monitoring
Information on the Federal Programs: Assistance Listing Number 98.001
Criteria: As stated in 2 CFR 200.331 part (b), all pass-through entities must evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring procedures to prescribe to each individual subrecipient.
Condition: Astraea has a subaward policy, which requires a risk assessment form be completed for each potential subrecipient. However, this step was not completed for all of the subrecipients in which Astraea engaged with during the fiscal year.
Cause: Astraea did not adhere to its policy in regards to risk assessment procedures.
Context: Astraea failed to perform risk assessment procedures. Our audit work in this area consisted of substantive testwork over a sample of subrecipient expenditures that were selected based on a defined threshold. We consider our sample to be representative of the populations, and thus, is a statistically valid sample. The issue is deemed to be systemic.
Effect: Astraea could inadvertently engage in relationships with subrecipients of higher risk without the appropriate level of oversight (i.e. monitoring) to ensure subrecipients are expending funds in accordance with the provisions and terms of the subaward.
Questioned Costs: None noted.
Identification as a Repeat Finding: Yes - Finding 2021-005.
Recommendation: We recommend Astraea adhere to its current subaward policy and ensure the risk assessment procedures over all of its subrecipients are performed and documented prior to engagement. Based on these risk assessments, Astraea should assign a risk level to each, and then determine the monitoring tools to apply based on these risk levels. We also recommend Astraea require its subrecipients to submit financial reports demonstrating use of each advance before advancing more funds, to ensure subrecipients are expending funds appropriately.
Finding 2022-005: Procurement
Information on the Federal Programs: Assistance Listing Number 98.001
Criteria: CFR 200.318 states that non-Federal entities must have and use documented procurement procedures consistent with the requirements for procurement regulations included in paragraphs 318 through 327.
Condition: Astraea's procurement policy references CFR 200.318-327 however the policy does not note how it will comply with the requirements and what the process is to ensure compliance is achieved. During our audit we noted multiple instances where vendors were engaged without any documentation of procurement process or justification to support using a noncompetitive procurement process in accordance with CFR 200.320(c).
Cause: Astraea does not have a procedure in place to ensure all vendors or suppliers paid with Federal funding are engaged in compliance with the Federal regulations.
Context: Without updating the policy to comply with CFR 200, Astraea is at risk of entering into contracts for goods or services under Federal awards that were not adequately procured based on the regulations in the Uniform Guidance and the awarding agency or pass-through entity could disallow the costs paid for the goods or services.
Effect: Astraea may have disallowed costs for not properly procuring goods or services.
Questioned Costs: None noted.
Identification as a Repeat Finding: Yes - 2021-006.
Recommendation: We recommend Astraea update the procurement policy to become compliant with CFR 200. We further recommend it ensure all staff are properly trained with respect to the new policy to ensure compliance.
Finding 2022-006: Suspension and Debarment and U.S. Government Regulations on Terrorism
Information on the Federal Programs: Assistance Listing Number 98.001
Criteria: CFR 200.213 states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; or (b) collecting a certification from that person; or (c) adding a clause or condition to the covered transaction with that person. Additionally, as outlined in each Department of State award, recipients of U.S. Government funds must adhere to the United States Government’s requirements on screening all potential vendors, suppliers, sub-contractors/grantees and employees against the United States Department of State’s Terrorism watch list. The screening of all potential vendors, suppliers, subcontractors/ grantees and employees must be documented in writing.
Condition: Astraea did not provide documentation to support its screenings for its potential and current vendors, suppliers, contractors, employees, etc. that were paid with Federal funds.
Cause: Astraea did not have a procedure in place to ensure all required screenings are performed and documentation to support the screening is maintained.
Context: During our audit, we inquired of evidence of such a process, and Astraea was unable to provide support with respect to this area. It should be noted, that Astraea did perform and document the required screenings in January 2023 (in response to the finding issued during the fiscal year 2021 audit finding).
Effect: Astraea could make payments to an entity or individual that has been debarred or suspended by the US Government; such costs would be disallowed, and Astraea could face consequences for lack of compliance.
Questioned Costs: None noted.
Identification as a Repeat Finding: Yes - Finding 2021-007.
Recommendation: We recommend Astraea develop a policy of how screenings will be performed and how documentation will be maintained in order to demonstrate compliance with government regulations. We further recommend it ensure all staff are properly trained with respect to the new policy to ensure compliance.
Finding 2022-007: Unallowable Costs / Cash Management
Criteria: As stated in 2 CFR 200.303, the non-Federal entity (i.e. the Organization) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition: Astraea charged unallowed overhead costs to a Federal grant. These unallowable expenses were charged to the Federal government and cash was collected by Astraea.
Cause: Astraea did not have a procedure in place to ensure all expenses charged to the Federal grants were allowable.
Context: During the audit, we noted Astaea's internal control processes were not effective, evidenced by the recording and billing of unallowable overhead costs.
Effect: Unallowable costs were billed to the Federal Government.
Questioned Costs: None noted. These unallowable costs were moved to refundable advance.
Identification as a Repeat Finding: No
Recommendation: We recommend Astraea develop a more stringent internal control process surrounding the review and approval process for expenses recorded to Federal projects.