Federal Agency: U.S. Department of Human Services
Federal Program Title: MFIP and TANF Youth
AL Number: 93.558
Pass-Through Agency: Various Counties
Pass-Through Number(s): N/A
Award Period: 1/1/2022-12/31/2022; 1/1/23-12/31/2023
Type of Finding:
• Material Weakness in Internal Control over Major Federal Programs and Other Matters
Criteria or specific requirement: The Organization must maintain records that adequately identify the source and application of funds for federally-funded activities. This includes maintaining documentation to support the allocation of indirect costs to ensure they are reasonable, allowable, and allocable. Furthermore, organizations are expected to have internal controls in place, including review procedures, to ensure the accuracy and compliance of financial allocations.
Condition: The Organization did not retain adequate documentation to support the calculation of its indirect cost allocation for the fiscal year ending June 30, 2023. Additionally, the Organization did not perform a review of the indirect cost allocation to ensure its accuracy and compliance with applicable regulations. Specifically, the Organization was unable to provide detailed records or worksheets that demonstrate how the indirect costs were allocated to various programs and departments, and there was no evidence of a review process in place.
Questioned costs: N/A
Context: During the internal control review, it was identified that the review process for indirect cost allocation was not completed as required for 2 of 3 indirect cost allocations tested and support was not retained for the indirect allocations made for the amount of $175,682. The Organization attempted to recreate the support but was unable to reconcile to the numbers originally allocated.
Cause: The Organization lacks a formalized process for retaining and organizing documentation related to the calculation of indirect cost allocations. Additionally, the established review process to verify the accuracy and compliance of these allocations was not followed. This may be due to insufficient training of staff responsible for financial record-keeping and review, or inadequate internal controls over documentation retention and review procedures.
Effect: Without proper documentation and a review process, there is an increased risk that indirect costs may be improperly allocated, leading to potential non-compliance with federal regulations. This could result in questioned costs during an audit, potential disallowance of costs, and the need to return funds to the federal government.
Repeat finding: No
Recommendation: The Organization should implement a comprehensive documentation retention policy that includes specific procedures for maintaining records supporting the calculation of indirect cost allocations. This policy should ensure that all relevant documentation is retained for the required period and is easily accessible for audit purposes. Additionally, the Organization should ensure the formal review process for indirect cost allocations is completed to verify their accuracy and compliance with applicable regulations. Staff responsible for financial record-keeping and review should receive training on the importance of documentation retention, review procedures, and the specific requirements under the Uniform Guidance.
Views of responsible officials and planned corrective actions: To strengthen our financial record-keeping, CMJTS will update our Document Retention Policy. This updated policy will introduce detailed guidelines for the management, maintenance, and secure storage of records that support indirect cost allocations, ensuring they are retained for the required period and easily accessible for audits. Additionally, we will establish a structured review process, including quarterly reviews by the accounting team and an annual reconciliation, to verify accuracy and compliance with applicable regulations. Any necessary adjustments will be documented and reviewed by the finance manager.
The CMJTS Executive meets monthly to review and calculate indirect cost allocations for all active grants. The established process is to determine total indirect costs (like rent, utilities, administrative salaries) for the agency by location and department and then allocate them across different grants using a calculated "indirect cost rate," which is usually a percentage of the direct costs associated with each program, based on factors like staff time, caseload size, or other relevant allocation bases; this ensures that each program bears a proportional share of the shared overhead expenses.
Federal Agency: U.S. Department of Human Services
Federal Program Title: MFIP and TANF Youth
AL Number: 93.558
Pass-Through Agency: Various Counties
Pass-Through Number(s): N/A
Award Period: 1/1/2022-12/31/2022; 1/1/23-12/31/2023
Type of Finding:
• Significant Deficiency in Internal Control over Major Federal Programs and Other Matters
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition: The Organization did not retain adequate documentation to support the allocation of an individual's time to various federally-funded programs for the fiscal year ending June 30, 2023.
Questioned costs: N/A
Context: During testing of payroll related expenses, it was identified that 1 of 29 selections did not have support for the allocation used in allocating payroll expenses to various grants.
Cause: The Organization lacks a formalized process for retaining and organizing documentation related to the allocation of individual employees' time. This may be due to insufficient training of staff responsible for timekeeping and financial record-keeping or inadequate internal controls over documentation retention.
Effect: Without proper documentation, there is an increased risk that personnel costs may be improperly allocated, leading to potential non-compliance with federal regulations. This could result in questioned costs during an audit, potential disallowance of costs, and the need to return funds to the federal government.
Repeat finding: No
Recommendation: The Organization should implement a comprehensive documentation retention policy that includes specific procedures for maintaining records supporting the allocation of individual employees' time. This policy should ensure that all relevant documentation, such as timesheets and work allocation records, is retained for the required period and is easily accessible for audit purposes. Additionally, staff responsible for timekeeping and financial record-keeping should receive training on the importance of documentation retention and the specific requirements under the Uniform Guidance.
Views of responsible officials and planned corrective actions: To establish a standardized cost allocation methodology for staff time, CMJTS implemented in-person monthly allocation meetings with the executive team and program managers responsible for programming, staffing, and budget oversight. These meetings provide a thorough review of program expenditures and staff time, ensuring accurate alignment with funding requirements. Conducting payroll allocation reviews in a group setting allows the executive team to validate cost assignments, address changes in percentage allocations across cost categories, and maintain compliance with administrative regulations and funding guidelines.
Federal Agency: U.S. Department of Human Services
Federal Program Title: MFIP and TANF Youth
AL Number: 93.558
Pass-Through Agency: Various Counties
Pass-Through Number(s): N/A
Award Period: 1/1/2022-12/31/2022; 1/1/23-12/31/2023
Type of Finding:
• Material Weakness in Internal Control over Major Federal Programs and Other Matters
Criteria or specific requirement: The Organization must maintain records that adequately identify the source and application of funds for federally-funded activities. This includes maintaining documentation to support the allocation of indirect costs to ensure they are reasonable, allowable, and allocable. Furthermore, organizations are expected to have internal controls in place, including review procedures, to ensure the accuracy and compliance of financial allocations.
Condition: The Organization did not retain adequate documentation to support the calculation of its indirect cost allocation for the fiscal year ending June 30, 2023. Additionally, the Organization did not perform a review of the indirect cost allocation to ensure its accuracy and compliance with applicable regulations. Specifically, the Organization was unable to provide detailed records or worksheets that demonstrate how the indirect costs were allocated to various programs and departments, and there was no evidence of a review process in place.
Questioned costs: N/A
Context: During the internal control review, it was identified that the review process for indirect cost allocation was not completed as required for 2 of 3 indirect cost allocations tested and support was not retained for the indirect allocations made for the amount of $175,682. The Organization attempted to recreate the support but was unable to reconcile to the numbers originally allocated.
Cause: The Organization lacks a formalized process for retaining and organizing documentation related to the calculation of indirect cost allocations. Additionally, the established review process to verify the accuracy and compliance of these allocations was not followed. This may be due to insufficient training of staff responsible for financial record-keeping and review, or inadequate internal controls over documentation retention and review procedures.
Effect: Without proper documentation and a review process, there is an increased risk that indirect costs may be improperly allocated, leading to potential non-compliance with federal regulations. This could result in questioned costs during an audit, potential disallowance of costs, and the need to return funds to the federal government.
Repeat finding: No
Recommendation: The Organization should implement a comprehensive documentation retention policy that includes specific procedures for maintaining records supporting the calculation of indirect cost allocations. This policy should ensure that all relevant documentation is retained for the required period and is easily accessible for audit purposes. Additionally, the Organization should ensure the formal review process for indirect cost allocations is completed to verify their accuracy and compliance with applicable regulations. Staff responsible for financial record-keeping and review should receive training on the importance of documentation retention, review procedures, and the specific requirements under the Uniform Guidance.
Views of responsible officials and planned corrective actions: To strengthen our financial record-keeping, CMJTS will update our Document Retention Policy. This updated policy will introduce detailed guidelines for the management, maintenance, and secure storage of records that support indirect cost allocations, ensuring they are retained for the required period and easily accessible for audits. Additionally, we will establish a structured review process, including quarterly reviews by the accounting team and an annual reconciliation, to verify accuracy and compliance with applicable regulations. Any necessary adjustments will be documented and reviewed by the finance manager.
The CMJTS Executive meets monthly to review and calculate indirect cost allocations for all active grants. The established process is to determine total indirect costs (like rent, utilities, administrative salaries) for the agency by location and department and then allocate them across different grants using a calculated "indirect cost rate," which is usually a percentage of the direct costs associated with each program, based on factors like staff time, caseload size, or other relevant allocation bases; this ensures that each program bears a proportional share of the shared overhead expenses.
Federal Agency: U.S. Department of Human Services
Federal Program Title: MFIP and TANF Youth
AL Number: 93.558
Pass-Through Agency: Various Counties
Pass-Through Number(s): N/A
Award Period: 1/1/2022-12/31/2022; 1/1/23-12/31/2023
Type of Finding:
• Significant Deficiency in Internal Control over Major Federal Programs and Other Matters
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition: The Organization did not retain adequate documentation to support the allocation of an individual's time to various federally-funded programs for the fiscal year ending June 30, 2023.
Questioned costs: N/A
Context: During testing of payroll related expenses, it was identified that 1 of 29 selections did not have support for the allocation used in allocating payroll expenses to various grants.
Cause: The Organization lacks a formalized process for retaining and organizing documentation related to the allocation of individual employees' time. This may be due to insufficient training of staff responsible for timekeeping and financial record-keeping or inadequate internal controls over documentation retention.
Effect: Without proper documentation, there is an increased risk that personnel costs may be improperly allocated, leading to potential non-compliance with federal regulations. This could result in questioned costs during an audit, potential disallowance of costs, and the need to return funds to the federal government.
Repeat finding: No
Recommendation: The Organization should implement a comprehensive documentation retention policy that includes specific procedures for maintaining records supporting the allocation of individual employees' time. This policy should ensure that all relevant documentation, such as timesheets and work allocation records, is retained for the required period and is easily accessible for audit purposes. Additionally, staff responsible for timekeeping and financial record-keeping should receive training on the importance of documentation retention and the specific requirements under the Uniform Guidance.
Views of responsible officials and planned corrective actions: To establish a standardized cost allocation methodology for staff time, CMJTS implemented in-person monthly allocation meetings with the executive team and program managers responsible for programming, staffing, and budget oversight. These meetings provide a thorough review of program expenditures and staff time, ensuring accurate alignment with funding requirements. Conducting payroll allocation reviews in a group setting allows the executive team to validate cost assignments, address changes in percentage allocations across cost categories, and maintain compliance with administrative regulations and funding guidelines.
Federal Agency: U.S. Department of Human Services
Federal Program Title: MFIP and TANF Youth
AL Number: 93.558
Pass-Through Agency: Various Counties
Pass-Through Number(s): N/A
Award Period: 1/1/2022-12/31/2022; 1/1/23-12/31/2023
Type of Finding:
• Material Weakness in Internal Control over Major Federal Programs and Other Matters
Criteria or specific requirement: The Organization must maintain records that adequately identify the source and application of funds for federally-funded activities. This includes maintaining documentation to support the allocation of indirect costs to ensure they are reasonable, allowable, and allocable. Furthermore, organizations are expected to have internal controls in place, including review procedures, to ensure the accuracy and compliance of financial allocations.
Condition: The Organization did not retain adequate documentation to support the calculation of its indirect cost allocation for the fiscal year ending June 30, 2023. Additionally, the Organization did not perform a review of the indirect cost allocation to ensure its accuracy and compliance with applicable regulations. Specifically, the Organization was unable to provide detailed records or worksheets that demonstrate how the indirect costs were allocated to various programs and departments, and there was no evidence of a review process in place.
Questioned costs: N/A
Context: During the internal control review, it was identified that the review process for indirect cost allocation was not completed as required for 2 of 3 indirect cost allocations tested and support was not retained for the indirect allocations made for the amount of $175,682. The Organization attempted to recreate the support but was unable to reconcile to the numbers originally allocated.
Cause: The Organization lacks a formalized process for retaining and organizing documentation related to the calculation of indirect cost allocations. Additionally, the established review process to verify the accuracy and compliance of these allocations was not followed. This may be due to insufficient training of staff responsible for financial record-keeping and review, or inadequate internal controls over documentation retention and review procedures.
Effect: Without proper documentation and a review process, there is an increased risk that indirect costs may be improperly allocated, leading to potential non-compliance with federal regulations. This could result in questioned costs during an audit, potential disallowance of costs, and the need to return funds to the federal government.
Repeat finding: No
Recommendation: The Organization should implement a comprehensive documentation retention policy that includes specific procedures for maintaining records supporting the calculation of indirect cost allocations. This policy should ensure that all relevant documentation is retained for the required period and is easily accessible for audit purposes. Additionally, the Organization should ensure the formal review process for indirect cost allocations is completed to verify their accuracy and compliance with applicable regulations. Staff responsible for financial record-keeping and review should receive training on the importance of documentation retention, review procedures, and the specific requirements under the Uniform Guidance.
Views of responsible officials and planned corrective actions: To strengthen our financial record-keeping, CMJTS will update our Document Retention Policy. This updated policy will introduce detailed guidelines for the management, maintenance, and secure storage of records that support indirect cost allocations, ensuring they are retained for the required period and easily accessible for audits. Additionally, we will establish a structured review process, including quarterly reviews by the accounting team and an annual reconciliation, to verify accuracy and compliance with applicable regulations. Any necessary adjustments will be documented and reviewed by the finance manager.
The CMJTS Executive meets monthly to review and calculate indirect cost allocations for all active grants. The established process is to determine total indirect costs (like rent, utilities, administrative salaries) for the agency by location and department and then allocate them across different grants using a calculated "indirect cost rate," which is usually a percentage of the direct costs associated with each program, based on factors like staff time, caseload size, or other relevant allocation bases; this ensures that each program bears a proportional share of the shared overhead expenses.
Federal Agency: U.S. Department of Human Services
Federal Program Title: MFIP and TANF Youth
AL Number: 93.558
Pass-Through Agency: Various Counties
Pass-Through Number(s): N/A
Award Period: 1/1/2022-12/31/2022; 1/1/23-12/31/2023
Type of Finding:
• Significant Deficiency in Internal Control over Major Federal Programs and Other Matters
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition: The Organization did not retain adequate documentation to support the allocation of an individual's time to various federally-funded programs for the fiscal year ending June 30, 2023.
Questioned costs: N/A
Context: During testing of payroll related expenses, it was identified that 1 of 29 selections did not have support for the allocation used in allocating payroll expenses to various grants.
Cause: The Organization lacks a formalized process for retaining and organizing documentation related to the allocation of individual employees' time. This may be due to insufficient training of staff responsible for timekeeping and financial record-keeping or inadequate internal controls over documentation retention.
Effect: Without proper documentation, there is an increased risk that personnel costs may be improperly allocated, leading to potential non-compliance with federal regulations. This could result in questioned costs during an audit, potential disallowance of costs, and the need to return funds to the federal government.
Repeat finding: No
Recommendation: The Organization should implement a comprehensive documentation retention policy that includes specific procedures for maintaining records supporting the allocation of individual employees' time. This policy should ensure that all relevant documentation, such as timesheets and work allocation records, is retained for the required period and is easily accessible for audit purposes. Additionally, staff responsible for timekeeping and financial record-keeping should receive training on the importance of documentation retention and the specific requirements under the Uniform Guidance.
Views of responsible officials and planned corrective actions: To establish a standardized cost allocation methodology for staff time, CMJTS implemented in-person monthly allocation meetings with the executive team and program managers responsible for programming, staffing, and budget oversight. These meetings provide a thorough review of program expenditures and staff time, ensuring accurate alignment with funding requirements. Conducting payroll allocation reviews in a group setting allows the executive team to validate cost assignments, address changes in percentage allocations across cost categories, and maintain compliance with administrative regulations and funding guidelines.
Federal Agency: U.S. Department of Human Services
Federal Program Title: MFIP and TANF Youth
AL Number: 93.558
Pass-Through Agency: Various Counties
Pass-Through Number(s): N/A
Award Period: 1/1/2022-12/31/2022; 1/1/23-12/31/2023
Type of Finding:
• Material Weakness in Internal Control over Major Federal Programs and Other Matters
Criteria or specific requirement: The Organization must maintain records that adequately identify the source and application of funds for federally-funded activities. This includes maintaining documentation to support the allocation of indirect costs to ensure they are reasonable, allowable, and allocable. Furthermore, organizations are expected to have internal controls in place, including review procedures, to ensure the accuracy and compliance of financial allocations.
Condition: The Organization did not retain adequate documentation to support the calculation of its indirect cost allocation for the fiscal year ending June 30, 2023. Additionally, the Organization did not perform a review of the indirect cost allocation to ensure its accuracy and compliance with applicable regulations. Specifically, the Organization was unable to provide detailed records or worksheets that demonstrate how the indirect costs were allocated to various programs and departments, and there was no evidence of a review process in place.
Questioned costs: N/A
Context: During the internal control review, it was identified that the review process for indirect cost allocation was not completed as required for 2 of 3 indirect cost allocations tested and support was not retained for the indirect allocations made for the amount of $175,682. The Organization attempted to recreate the support but was unable to reconcile to the numbers originally allocated.
Cause: The Organization lacks a formalized process for retaining and organizing documentation related to the calculation of indirect cost allocations. Additionally, the established review process to verify the accuracy and compliance of these allocations was not followed. This may be due to insufficient training of staff responsible for financial record-keeping and review, or inadequate internal controls over documentation retention and review procedures.
Effect: Without proper documentation and a review process, there is an increased risk that indirect costs may be improperly allocated, leading to potential non-compliance with federal regulations. This could result in questioned costs during an audit, potential disallowance of costs, and the need to return funds to the federal government.
Repeat finding: No
Recommendation: The Organization should implement a comprehensive documentation retention policy that includes specific procedures for maintaining records supporting the calculation of indirect cost allocations. This policy should ensure that all relevant documentation is retained for the required period and is easily accessible for audit purposes. Additionally, the Organization should ensure the formal review process for indirect cost allocations is completed to verify their accuracy and compliance with applicable regulations. Staff responsible for financial record-keeping and review should receive training on the importance of documentation retention, review procedures, and the specific requirements under the Uniform Guidance.
Views of responsible officials and planned corrective actions: To strengthen our financial record-keeping, CMJTS will update our Document Retention Policy. This updated policy will introduce detailed guidelines for the management, maintenance, and secure storage of records that support indirect cost allocations, ensuring they are retained for the required period and easily accessible for audits. Additionally, we will establish a structured review process, including quarterly reviews by the accounting team and an annual reconciliation, to verify accuracy and compliance with applicable regulations. Any necessary adjustments will be documented and reviewed by the finance manager.
The CMJTS Executive meets monthly to review and calculate indirect cost allocations for all active grants. The established process is to determine total indirect costs (like rent, utilities, administrative salaries) for the agency by location and department and then allocate them across different grants using a calculated "indirect cost rate," which is usually a percentage of the direct costs associated with each program, based on factors like staff time, caseload size, or other relevant allocation bases; this ensures that each program bears a proportional share of the shared overhead expenses.
Federal Agency: U.S. Department of Human Services
Federal Program Title: MFIP and TANF Youth
AL Number: 93.558
Pass-Through Agency: Various Counties
Pass-Through Number(s): N/A
Award Period: 1/1/2022-12/31/2022; 1/1/23-12/31/2023
Type of Finding:
• Significant Deficiency in Internal Control over Major Federal Programs and Other Matters
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition: The Organization did not retain adequate documentation to support the allocation of an individual's time to various federally-funded programs for the fiscal year ending June 30, 2023.
Questioned costs: N/A
Context: During testing of payroll related expenses, it was identified that 1 of 29 selections did not have support for the allocation used in allocating payroll expenses to various grants.
Cause: The Organization lacks a formalized process for retaining and organizing documentation related to the allocation of individual employees' time. This may be due to insufficient training of staff responsible for timekeeping and financial record-keeping or inadequate internal controls over documentation retention.
Effect: Without proper documentation, there is an increased risk that personnel costs may be improperly allocated, leading to potential non-compliance with federal regulations. This could result in questioned costs during an audit, potential disallowance of costs, and the need to return funds to the federal government.
Repeat finding: No
Recommendation: The Organization should implement a comprehensive documentation retention policy that includes specific procedures for maintaining records supporting the allocation of individual employees' time. This policy should ensure that all relevant documentation, such as timesheets and work allocation records, is retained for the required period and is easily accessible for audit purposes. Additionally, staff responsible for timekeeping and financial record-keeping should receive training on the importance of documentation retention and the specific requirements under the Uniform Guidance.
Views of responsible officials and planned corrective actions: To establish a standardized cost allocation methodology for staff time, CMJTS implemented in-person monthly allocation meetings with the executive team and program managers responsible for programming, staffing, and budget oversight. These meetings provide a thorough review of program expenditures and staff time, ensuring accurate alignment with funding requirements. Conducting payroll allocation reviews in a group setting allows the executive team to validate cost assignments, address changes in percentage allocations across cost categories, and maintain compliance with administrative regulations and funding guidelines.