Finding Number 2023-001 Internal Controls over Allowable Activities and Costs Criteria:
2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.303, Internal controls states “The nonFederal” entity must: (1) 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 terms and conditions of the Federal award.
Section 200.430 (i) Standards for Documentation of Personnel Expenses states (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities…; (v) Comply with the established accounting policies and practices of the non-Federal entity…; (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: As per the grant agreement and the approved budget, there are no approved costs for occupancy and indirect costs. However, we noted during our testing there were a few expenditures related to the allocation of occupancy and national support (indirect costs) which are not allowed per the grant agreement. Additionally, management is charging salary expenses to the grant based on the estimated percentage on a monthly basis. The allocation methodology currently utilized is not supported with proper time and effort records.
Cause: Certain controls related to the oversight of compliance are designed and implemented but are not effectively working. Also, evidence of time and effort is not properly documented.
Effect: The lack of effective control over compliance resulted in an instance of noncompliance identified. In addition, not maintaining adequate supporting documentation for personnel cost is a violation of federal regulations which could result in unallowed payroll costs being charged to the federally funded program.
Questioned Cost: Total expenditure of $13,960.20 did not comply with the compliance requirements.
Context: During our review of 12 expenditures, 4 instances were identified where the costs did not meet the eligibility and allowability compliance requirements. During our review of 29 payroll expense items, we noted that payroll expenses charged to the program were based on estimates instead of actual time and effort.
Finding Number 2023-001 Internal Controls over Allowable Activities and Costs Criteria:
2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.303, Internal controls states “The nonFederal” entity must: (1) 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 terms and conditions of the Federal award.
Section 200.430 (i) Standards for Documentation of Personnel Expenses states (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities…; (v) Comply with the established accounting policies and practices of the non-Federal entity…; (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: As per the grant agreement and the approved budget, there are no approved costs for occupancy and indirect costs. However, we noted during our testing there were a few expenditures related to the allocation of occupancy and national support (indirect costs) which are not allowed per the grant agreement. Additionally, management is charging salary expenses to the grant based on the estimated percentage on a monthly basis. The allocation methodology currently utilized is not supported with proper time and effort records.
Cause: Certain controls related to the oversight of compliance are designed and implemented but are not effectively working. Also, evidence of time and effort is not properly documented.
Effect: The lack of effective control over compliance resulted in an instance of noncompliance identified. In addition, not maintaining adequate supporting documentation for personnel cost is a violation of federal regulations which could result in unallowed payroll costs being charged to the federally funded program.
Questioned Cost: Total expenditure of $13,960.20 did not comply with the compliance requirements.
Context: During our review of 12 expenditures, 4 instances were identified where the costs did not meet the eligibility and allowability compliance requirements. During our review of 29 payroll expense items, we noted that payroll expenses charged to the program were based on estimates instead of actual time and effort.
Finding Number 2023-001 Internal Controls over Allowable Activities and Costs Criteria:
2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.303, Internal controls states “The nonFederal” entity must: (1) 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 terms and conditions of the Federal award.
Section 200.430 (i) Standards for Documentation of Personnel Expenses states (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities…; (v) Comply with the established accounting policies and practices of the non-Federal entity…; (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: As per the grant agreement and the approved budget, there are no approved costs for occupancy and indirect costs. However, we noted during our testing there were a few expenditures related to the allocation of occupancy and national support (indirect costs) which are not allowed per the grant agreement. Additionally, management is charging salary expenses to the grant based on the estimated percentage on a monthly basis. The allocation methodology currently utilized is not supported with proper time and effort records.
Cause: Certain controls related to the oversight of compliance are designed and implemented but are not effectively working. Also, evidence of time and effort is not properly documented.
Effect: The lack of effective control over compliance resulted in an instance of noncompliance identified. In addition, not maintaining adequate supporting documentation for personnel cost is a violation of federal regulations which could result in unallowed payroll costs being charged to the federally funded program.
Questioned Cost: Total expenditure of $13,960.20 did not comply with the compliance requirements.
Context: During our review of 12 expenditures, 4 instances were identified where the costs did not meet the eligibility and allowability compliance requirements. During our review of 29 payroll expense items, we noted that payroll expenses charged to the program were based on estimates instead of actual time and effort.
Finding Number 2023-001 Internal Controls over Allowable Activities and Costs Criteria:
2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.303, Internal controls states “The nonFederal” entity must: (1) 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 terms and conditions of the Federal award.
Section 200.430 (i) Standards for Documentation of Personnel Expenses states (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities…; (v) Comply with the established accounting policies and practices of the non-Federal entity…; (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: As per the grant agreement and the approved budget, there are no approved costs for occupancy and indirect costs. However, we noted during our testing there were a few expenditures related to the allocation of occupancy and national support (indirect costs) which are not allowed per the grant agreement. Additionally, management is charging salary expenses to the grant based on the estimated percentage on a monthly basis. The allocation methodology currently utilized is not supported with proper time and effort records.
Cause: Certain controls related to the oversight of compliance are designed and implemented but are not effectively working. Also, evidence of time and effort is not properly documented.
Effect: The lack of effective control over compliance resulted in an instance of noncompliance identified. In addition, not maintaining adequate supporting documentation for personnel cost is a violation of federal regulations which could result in unallowed payroll costs being charged to the federally funded program.
Questioned Cost: Total expenditure of $13,960.20 did not comply with the compliance requirements.
Context: During our review of 12 expenditures, 4 instances were identified where the costs did not meet the eligibility and allowability compliance requirements. During our review of 29 payroll expense items, we noted that payroll expenses charged to the program were based on estimates instead of actual time and effort.