Finding 2023-003 Inadequate Tracking of Federal Expenses (Allowable Costs)
Federal Programs: All
Criteria: In accordance with CFR 200.302 organizations receiving Federal awards must maintain
accurate records that adequately identify the source and application of Federal funds. This includes
tracking Federal expenditures separately and distinctly within their accounting system. Additionally,
in accordance with CFR 200.303, the non-Federal entity 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. These internal controls should be in compliance with
guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework” issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Organization's use of class codes in QuickBooks to track Federal expenses was
found to be inadequate. Although the Organization uses QuickBooks to record financial
transactions, there is no systematic method in place to ensure that Federal expenditures are
properly classified and tracked using distinct class codes.
Cause: The deficiency in tracking Federal expenses within QuickBooks using class codes appears
to stem from a lack of understanding or awareness of the requirements outlined in Uniform
Guidance. Additionally, there may be insufficient training provided to staff responsible for financial
management and accounting practices.
Effect or Potential Effect: Without proper tracking of Federal expenses using class codes, the
Organization risks commingling Federal funds with other sources of revenue, which could lead to
inaccurate reporting and potential non-compliance with Uniform Guidance requirements. This
deficiency increases the likelihood of errors in financial reporting and raises concerns about the
Organization's ability to demonstrate proper stewardship of Federal funds.
Questioned Costs: Indeterminable.
Context: The Organization does not currently use its financial management system to leverage the
tracking of Federal funds between programs; the tracking is currently manual, based on Excel
spreadsheets, and difficult to track/audit.
Recommendation: It is recommended that the Organization establish and implement procedures
to effectively track Federal expenses within QuickBooks using distinct class codes in accordance
with 2 CFR 200.302. This may involve providing training to staff on the proper use of class codes
and ensuring that all Federal expenditures are consistently and accurately classified in the
accounting system.
Finding 2023-004: Time Tracking and Allocations (Allowable Costs and Activities Allowable)
Federal Programs: All
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 employees were not required
to utilize or submit timesheets (unless hourly).
Cause: There is no internal or formal policy by the Organization that requires the use of timesheets
for tracking of time spent and on which projects/programs, including those that are federally funded.
Effect or Potential Effect: The current system does not allow the Organization to accurately track
and charge salaries and wages to its various programs. As a result, the Organization could
inadvertently mischarge salaries and wages to those programs, including those federally funded.
Questioned Costs: Indeterminable.
Context: The Organization does not a documented audit trail showing the approval of reports.
Recommendation: We recommend the Organization 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 Organization should prepare and maintain a
reconciliation that shows 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 2023-003 Inadequate Tracking of Federal Expenses (Allowable Costs)
Federal Programs: All
Criteria: In accordance with CFR 200.302 organizations receiving Federal awards must maintain
accurate records that adequately identify the source and application of Federal funds. This includes
tracking Federal expenditures separately and distinctly within their accounting system. Additionally,
in accordance with CFR 200.303, the non-Federal entity 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. These internal controls should be in compliance with
guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework” issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Organization's use of class codes in QuickBooks to track Federal expenses was
found to be inadequate. Although the Organization uses QuickBooks to record financial
transactions, there is no systematic method in place to ensure that Federal expenditures are
properly classified and tracked using distinct class codes.
Cause: The deficiency in tracking Federal expenses within QuickBooks using class codes appears
to stem from a lack of understanding or awareness of the requirements outlined in Uniform
Guidance. Additionally, there may be insufficient training provided to staff responsible for financial
management and accounting practices.
Effect or Potential Effect: Without proper tracking of Federal expenses using class codes, the
Organization risks commingling Federal funds with other sources of revenue, which could lead to
inaccurate reporting and potential non-compliance with Uniform Guidance requirements. This
deficiency increases the likelihood of errors in financial reporting and raises concerns about the
Organization's ability to demonstrate proper stewardship of Federal funds.
Questioned Costs: Indeterminable.
Context: The Organization does not currently use its financial management system to leverage the
tracking of Federal funds between programs; the tracking is currently manual, based on Excel
spreadsheets, and difficult to track/audit.
Recommendation: It is recommended that the Organization establish and implement procedures
to effectively track Federal expenses within QuickBooks using distinct class codes in accordance
with 2 CFR 200.302. This may involve providing training to staff on the proper use of class codes
and ensuring that all Federal expenditures are consistently and accurately classified in the
accounting system.
Finding 2023-004: Time Tracking and Allocations (Allowable Costs and Activities Allowable)
Federal Programs: All
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 employees were not required
to utilize or submit timesheets (unless hourly).
Cause: There is no internal or formal policy by the Organization that requires the use of timesheets
for tracking of time spent and on which projects/programs, including those that are federally funded.
Effect or Potential Effect: The current system does not allow the Organization to accurately track
and charge salaries and wages to its various programs. As a result, the Organization could
inadvertently mischarge salaries and wages to those programs, including those federally funded.
Questioned Costs: Indeterminable.
Context: The Organization does not a documented audit trail showing the approval of reports.
Recommendation: We recommend the Organization 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 Organization should prepare and maintain a
reconciliation that shows 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 2023-003 Inadequate Tracking of Federal Expenses (Allowable Costs)
Federal Programs: All
Criteria: In accordance with CFR 200.302 organizations receiving Federal awards must maintain
accurate records that adequately identify the source and application of Federal funds. This includes
tracking Federal expenditures separately and distinctly within their accounting system. Additionally,
in accordance with CFR 200.303, the non-Federal entity 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. These internal controls should be in compliance with
guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework” issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Organization's use of class codes in QuickBooks to track Federal expenses was
found to be inadequate. Although the Organization uses QuickBooks to record financial
transactions, there is no systematic method in place to ensure that Federal expenditures are
properly classified and tracked using distinct class codes.
Cause: The deficiency in tracking Federal expenses within QuickBooks using class codes appears
to stem from a lack of understanding or awareness of the requirements outlined in Uniform
Guidance. Additionally, there may be insufficient training provided to staff responsible for financial
management and accounting practices.
Effect or Potential Effect: Without proper tracking of Federal expenses using class codes, the
Organization risks commingling Federal funds with other sources of revenue, which could lead to
inaccurate reporting and potential non-compliance with Uniform Guidance requirements. This
deficiency increases the likelihood of errors in financial reporting and raises concerns about the
Organization's ability to demonstrate proper stewardship of Federal funds.
Questioned Costs: Indeterminable.
Context: The Organization does not currently use its financial management system to leverage the
tracking of Federal funds between programs; the tracking is currently manual, based on Excel
spreadsheets, and difficult to track/audit.
Recommendation: It is recommended that the Organization establish and implement procedures
to effectively track Federal expenses within QuickBooks using distinct class codes in accordance
with 2 CFR 200.302. This may involve providing training to staff on the proper use of class codes
and ensuring that all Federal expenditures are consistently and accurately classified in the
accounting system.
Finding 2023-004: Time Tracking and Allocations (Allowable Costs and Activities Allowable)
Federal Programs: All
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 employees were not required
to utilize or submit timesheets (unless hourly).
Cause: There is no internal or formal policy by the Organization that requires the use of timesheets
for tracking of time spent and on which projects/programs, including those that are federally funded.
Effect or Potential Effect: The current system does not allow the Organization to accurately track
and charge salaries and wages to its various programs. As a result, the Organization could
inadvertently mischarge salaries and wages to those programs, including those federally funded.
Questioned Costs: Indeterminable.
Context: The Organization does not a documented audit trail showing the approval of reports.
Recommendation: We recommend the Organization 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 Organization should prepare and maintain a
reconciliation that shows 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 2023-003 Inadequate Tracking of Federal Expenses (Allowable Costs)
Federal Programs: All
Criteria: In accordance with CFR 200.302 organizations receiving Federal awards must maintain
accurate records that adequately identify the source and application of Federal funds. This includes
tracking Federal expenditures separately and distinctly within their accounting system. Additionally,
in accordance with CFR 200.303, the non-Federal entity 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. These internal controls should be in compliance with
guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework” issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Organization's use of class codes in QuickBooks to track Federal expenses was
found to be inadequate. Although the Organization uses QuickBooks to record financial
transactions, there is no systematic method in place to ensure that Federal expenditures are
properly classified and tracked using distinct class codes.
Cause: The deficiency in tracking Federal expenses within QuickBooks using class codes appears
to stem from a lack of understanding or awareness of the requirements outlined in Uniform
Guidance. Additionally, there may be insufficient training provided to staff responsible for financial
management and accounting practices.
Effect or Potential Effect: Without proper tracking of Federal expenses using class codes, the
Organization risks commingling Federal funds with other sources of revenue, which could lead to
inaccurate reporting and potential non-compliance with Uniform Guidance requirements. This
deficiency increases the likelihood of errors in financial reporting and raises concerns about the
Organization's ability to demonstrate proper stewardship of Federal funds.
Questioned Costs: Indeterminable.
Context: The Organization does not currently use its financial management system to leverage the
tracking of Federal funds between programs; the tracking is currently manual, based on Excel
spreadsheets, and difficult to track/audit.
Recommendation: It is recommended that the Organization establish and implement procedures
to effectively track Federal expenses within QuickBooks using distinct class codes in accordance
with 2 CFR 200.302. This may involve providing training to staff on the proper use of class codes
and ensuring that all Federal expenditures are consistently and accurately classified in the
accounting system.
Finding 2023-004: Time Tracking and Allocations (Allowable Costs and Activities Allowable)
Federal Programs: All
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 employees were not required
to utilize or submit timesheets (unless hourly).
Cause: There is no internal or formal policy by the Organization that requires the use of timesheets
for tracking of time spent and on which projects/programs, including those that are federally funded.
Effect or Potential Effect: The current system does not allow the Organization to accurately track
and charge salaries and wages to its various programs. As a result, the Organization could
inadvertently mischarge salaries and wages to those programs, including those federally funded.
Questioned Costs: Indeterminable.
Context: The Organization does not a documented audit trail showing the approval of reports.
Recommendation: We recommend the Organization 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 Organization should prepare and maintain a
reconciliation that shows 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 2023-003 Inadequate Tracking of Federal Expenses (Allowable Costs)
Federal Programs: All
Criteria: In accordance with CFR 200.302 organizations receiving Federal awards must maintain
accurate records that adequately identify the source and application of Federal funds. This includes
tracking Federal expenditures separately and distinctly within their accounting system. Additionally,
in accordance with CFR 200.303, the non-Federal entity 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. These internal controls should be in compliance with
guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework” issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Organization's use of class codes in QuickBooks to track Federal expenses was
found to be inadequate. Although the Organization uses QuickBooks to record financial
transactions, there is no systematic method in place to ensure that Federal expenditures are
properly classified and tracked using distinct class codes.
Cause: The deficiency in tracking Federal expenses within QuickBooks using class codes appears
to stem from a lack of understanding or awareness of the requirements outlined in Uniform
Guidance. Additionally, there may be insufficient training provided to staff responsible for financial
management and accounting practices.
Effect or Potential Effect: Without proper tracking of Federal expenses using class codes, the
Organization risks commingling Federal funds with other sources of revenue, which could lead to
inaccurate reporting and potential non-compliance with Uniform Guidance requirements. This
deficiency increases the likelihood of errors in financial reporting and raises concerns about the
Organization's ability to demonstrate proper stewardship of Federal funds.
Questioned Costs: Indeterminable.
Context: The Organization does not currently use its financial management system to leverage the
tracking of Federal funds between programs; the tracking is currently manual, based on Excel
spreadsheets, and difficult to track/audit.
Recommendation: It is recommended that the Organization establish and implement procedures
to effectively track Federal expenses within QuickBooks using distinct class codes in accordance
with 2 CFR 200.302. This may involve providing training to staff on the proper use of class codes
and ensuring that all Federal expenditures are consistently and accurately classified in the
accounting system.
Finding 2023-004: Time Tracking and Allocations (Allowable Costs and Activities Allowable)
Federal Programs: All
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 employees were not required
to utilize or submit timesheets (unless hourly).
Cause: There is no internal or formal policy by the Organization that requires the use of timesheets
for tracking of time spent and on which projects/programs, including those that are federally funded.
Effect or Potential Effect: The current system does not allow the Organization to accurately track
and charge salaries and wages to its various programs. As a result, the Organization could
inadvertently mischarge salaries and wages to those programs, including those federally funded.
Questioned Costs: Indeterminable.
Context: The Organization does not a documented audit trail showing the approval of reports.
Recommendation: We recommend the Organization 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 Organization should prepare and maintain a
reconciliation that shows 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 2023-003 Inadequate Tracking of Federal Expenses (Allowable Costs)
Federal Programs: All
Criteria: In accordance with CFR 200.302 organizations receiving Federal awards must maintain
accurate records that adequately identify the source and application of Federal funds. This includes
tracking Federal expenditures separately and distinctly within their accounting system. Additionally,
in accordance with CFR 200.303, the non-Federal entity 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. These internal controls should be in compliance with
guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework” issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Organization's use of class codes in QuickBooks to track Federal expenses was
found to be inadequate. Although the Organization uses QuickBooks to record financial
transactions, there is no systematic method in place to ensure that Federal expenditures are
properly classified and tracked using distinct class codes.
Cause: The deficiency in tracking Federal expenses within QuickBooks using class codes appears
to stem from a lack of understanding or awareness of the requirements outlined in Uniform
Guidance. Additionally, there may be insufficient training provided to staff responsible for financial
management and accounting practices.
Effect or Potential Effect: Without proper tracking of Federal expenses using class codes, the
Organization risks commingling Federal funds with other sources of revenue, which could lead to
inaccurate reporting and potential non-compliance with Uniform Guidance requirements. This
deficiency increases the likelihood of errors in financial reporting and raises concerns about the
Organization's ability to demonstrate proper stewardship of Federal funds.
Questioned Costs: Indeterminable.
Context: The Organization does not currently use its financial management system to leverage the
tracking of Federal funds between programs; the tracking is currently manual, based on Excel
spreadsheets, and difficult to track/audit.
Recommendation: It is recommended that the Organization establish and implement procedures
to effectively track Federal expenses within QuickBooks using distinct class codes in accordance
with 2 CFR 200.302. This may involve providing training to staff on the proper use of class codes
and ensuring that all Federal expenditures are consistently and accurately classified in the
accounting system.
Finding 2023-004: Time Tracking and Allocations (Allowable Costs and Activities Allowable)
Federal Programs: All
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 employees were not required
to utilize or submit timesheets (unless hourly).
Cause: There is no internal or formal policy by the Organization that requires the use of timesheets
for tracking of time spent and on which projects/programs, including those that are federally funded.
Effect or Potential Effect: The current system does not allow the Organization to accurately track
and charge salaries and wages to its various programs. As a result, the Organization could
inadvertently mischarge salaries and wages to those programs, including those federally funded.
Questioned Costs: Indeterminable.
Context: The Organization does not a documented audit trail showing the approval of reports.
Recommendation: We recommend the Organization 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 Organization should prepare and maintain a
reconciliation that shows 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.