Significant Deficiencies
2024-001. Payroll (Allowable Costs/Cost Principles)
United States Department of Education, Passed-through New York State Department of Education:
Special Education Cluster:
Special Education Grants to States ALN: 84.027
Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430.
Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the performed. The documentation should support the distribution of the employee’s compensation among specific activities if the employees work on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activation reports (PAR) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in some instances, the District’s payroll verification forms were either not reviewed or signed by either the employer and employee, and they did not accurately reflect the actual allocation that was charged to the grant in order to comply with Subpart I, 2 CFR §200.430.
Cause: Employee PAR forms should accurately reflect time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries, and other forms of compensation charged to a federal program. During our audit testing, we noted that some of the District’s payroll verification forms did not indicate the correct amount or percentage allocation for the employee that was charged to the grant, and there were some instances where the District’s payroll verification forms were not signed off by either the employer or employee. See Context below for more specifics.
Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal awards.
Questioned Costs: None reported.
Context: For the Special Education Cluster, based on a sample of seven (7) employees, we noted that all seven (7) employee payroll verification forms did not accurately reflect the amount charged to the grant, and in two (2) instances we noted the employee payroll verification forms were not signed by either the employer or employee.
Recommendation: The District should prepare and maintain the appropriate documentation to support salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. In addition, the District must ensure that all payroll verification forms are properly signed by both the employer and the employee.
Views of Responsible Officials of Auditee: The District acknowledges the finding and will thoroughly review and maintain the federal personnel activity reports to ensure each employee’s salary, or other forms of compensation, are properly approved and signed off by both the employer and employee. Additionally, the District will ensure that the amount charged to the grant corresponds to the federal program to which the employees’ earnings were allocated, based on time and effort, in compliance with Subpart I, 2 CFR §200.430.
Significant Deficiencies
2024-002. Payroll (Improper Payments)
United States Department of Education, Passed-through New York State Department of Education:
Education Stabilization Funds
COVID 19: American Rescue Plan – Elementary and
Secondary School Emergency Relief ALN: 84.425U
Criteria: Payments charged to Federal awards must comply with 2 CFR §200.1 (Improper Payments), which defines an improper payment as any payment that should not have been made or was made in an incorrect amount. This includes duplicate salary payments, which are unallowable under federal guidelines. Salaries and wages must be accurately recorded and allocated to prevent overpayments or redundant charges to federal programs.
Condition: During the current year, the audit identified instances of duplicate salary payments being charged to Federal awards. These payments resulted in certain employees being charged to multiple grants for federal reimbursement. Our audit review revealed that payroll records, including transactions where employees’ salaries were recorded more than once, leading to noncompliance with 2 CFR §200.1 regarding improper payments.
Cause: The duplication of salary payments appears to have resulted from errors in payroll review processing and grant allocation. During our audit, we noted the improper payments were caused by the lack of adequate internal controls to verify and reconcile payroll disbursements before grant reimbursement requests were made. Consequently, some of the salary allocations were inadvertently recorded multiple times across different federal programs. See Context below for more specifics.
Effect: Noncompliance with 2 CFR §200.1 may result in disallowed costs and repayment obligations to the Federal government. The presence of duplicate payments charged to grants increases the risk of financial misstatement and potential federal audit findings, which could impact future grant funding.
Questioned Costs: None reported. The identified duplicate salary payments charged to two grants did not meet the $25,000 threshold for reportable questioned costs in accordance with Uniform Guidance.
Context: For the Education Stabilization Funds, based on a sample of nine (9) employees, we noted four (4) of the nine (9) employees were reported on two different federal programs grants for which the District received duplication of federal reimbursement.
Recommendation: The District should enhance its internal payroll controls to identify and prevent duplicate salary payments before submitting reimbursement requests to Federal grants. To prevent duplicate payments, the District should implement periodic reconciliations or review of payroll expenses charged to Federal programs, as well as train payroll personnel and grant managers on compliance with 2 CFR §200.1.
Views of Responsible Officials of Auditee: The District acknowledges the findings and will implement stronger internal controls to ensure that salary payments are accurately recorded and reconciled to prevent duplicate submissions of reimbursement to the federal funding source. In addition, management is in the process of contacting the funding award agency to determine whether reimbursement for the improper payments charged to the grant is necessary.
Significant Deficiencies
2024-001. Payroll (Allowable Costs/Cost Principles)
United States Department of Education, Passed-through New York State Department of Education:
Special Education Cluster:
Special Education Grants to States ALN: 84.027
Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430.
Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the performed. The documentation should support the distribution of the employee’s compensation among specific activities if the employees work on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activation reports (PAR) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in some instances, the District’s payroll verification forms were either not reviewed or signed by either the employer and employee, and they did not accurately reflect the actual allocation that was charged to the grant in order to comply with Subpart I, 2 CFR §200.430.
Cause: Employee PAR forms should accurately reflect time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries, and other forms of compensation charged to a federal program. During our audit testing, we noted that some of the District’s payroll verification forms did not indicate the correct amount or percentage allocation for the employee that was charged to the grant, and there were some instances where the District’s payroll verification forms were not signed off by either the employer or employee. See Context below for more specifics.
Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal awards.
Questioned Costs: None reported.
Context: For the Special Education Cluster, based on a sample of seven (7) employees, we noted that all seven (7) employee payroll verification forms did not accurately reflect the amount charged to the grant, and in two (2) instances we noted the employee payroll verification forms were not signed by either the employer or employee.
Recommendation: The District should prepare and maintain the appropriate documentation to support salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. In addition, the District must ensure that all payroll verification forms are properly signed by both the employer and the employee.
Views of Responsible Officials of Auditee: The District acknowledges the finding and will thoroughly review and maintain the federal personnel activity reports to ensure each employee’s salary, or other forms of compensation, are properly approved and signed off by both the employer and employee. Additionally, the District will ensure that the amount charged to the grant corresponds to the federal program to which the employees’ earnings were allocated, based on time and effort, in compliance with Subpart I, 2 CFR §200.430.
Significant Deficiencies
2024-002. Payroll (Improper Payments)
United States Department of Education, Passed-through New York State Department of Education:
Education Stabilization Funds
COVID 19: American Rescue Plan – Elementary and
Secondary School Emergency Relief ALN: 84.425U
Criteria: Payments charged to Federal awards must comply with 2 CFR §200.1 (Improper Payments), which defines an improper payment as any payment that should not have been made or was made in an incorrect amount. This includes duplicate salary payments, which are unallowable under federal guidelines. Salaries and wages must be accurately recorded and allocated to prevent overpayments or redundant charges to federal programs.
Condition: During the current year, the audit identified instances of duplicate salary payments being charged to Federal awards. These payments resulted in certain employees being charged to multiple grants for federal reimbursement. Our audit review revealed that payroll records, including transactions where employees’ salaries were recorded more than once, leading to noncompliance with 2 CFR §200.1 regarding improper payments.
Cause: The duplication of salary payments appears to have resulted from errors in payroll review processing and grant allocation. During our audit, we noted the improper payments were caused by the lack of adequate internal controls to verify and reconcile payroll disbursements before grant reimbursement requests were made. Consequently, some of the salary allocations were inadvertently recorded multiple times across different federal programs. See Context below for more specifics.
Effect: Noncompliance with 2 CFR §200.1 may result in disallowed costs and repayment obligations to the Federal government. The presence of duplicate payments charged to grants increases the risk of financial misstatement and potential federal audit findings, which could impact future grant funding.
Questioned Costs: None reported. The identified duplicate salary payments charged to two grants did not meet the $25,000 threshold for reportable questioned costs in accordance with Uniform Guidance.
Context: For the Education Stabilization Funds, based on a sample of nine (9) employees, we noted four (4) of the nine (9) employees were reported on two different federal programs grants for which the District received duplication of federal reimbursement.
Recommendation: The District should enhance its internal payroll controls to identify and prevent duplicate salary payments before submitting reimbursement requests to Federal grants. To prevent duplicate payments, the District should implement periodic reconciliations or review of payroll expenses charged to Federal programs, as well as train payroll personnel and grant managers on compliance with 2 CFR §200.1.
Views of Responsible Officials of Auditee: The District acknowledges the findings and will implement stronger internal controls to ensure that salary payments are accurately recorded and reconciled to prevent duplicate submissions of reimbursement to the federal funding source. In addition, management is in the process of contacting the funding award agency to determine whether reimbursement for the improper payments charged to the grant is necessary.