Finding 2024-002: Time Tracking and Payroll Allocations (Material Weakness)
See Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a))
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: As part of our audit procedures around payroll, we noted instances of payroll allocations
to programs which did not accurately represent the time worked and/or salary rate of the employee.
While misallocations were not significant in their amounts, the errors themselves suggest the need
for more detailed review of the payroll allocation approval and entry process.
Cause: The review of the payroll allocation entry and process was not sufficient to catch the errors.
Context: The misallocations identified represent 10% of the sampled employees (4 out of 40).
Although the majority of payroll allocations were supported by appropriate documentation, these four
exceptions suggest a need for improved controls over time and effort reporting to prevent isolated
errors from becoming more systemic issues.
Effect: Astraea could inadvertently mischarge salaries and wages to its various programs.
Questioned Costs: Undetermined.
Identification as a Repeat Finding, if Applicable: Finding 2023-003
Recommendation: We recommend that the finance department perform a more detailed review of
the monthly program allocations to ensure complete and accurate entry of payroll allocations.
Finding 2024-003: Subrecipient Management and Monitoring (Material Weakness)
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. Additionally, per 2 CFR 200.332(a), pass-through entities
must include specific information in subrecipient agreements, such as the Assistance Listing Number
(ALN), compliance requirements, and monitoring responsibilities, to ensure proper oversight and
accountability.
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.
Furthermore, during our review of subrecipient agreements, we noted that certain agreements did not
contain all the required elements as outlined in 2 CFR 200.332(a).
Cause: Astraea did not adhere to its policy in regards to risk assessment procedures. Additionally,
Astraea did not have formalized procedures for ensuring all required elements, including the ALN,
were included in subrecipient agreements.
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. Additionally, during our
review of subrecipient agreements we noted two that did not include the required ALN, which is
necessary to properly identify the source of Federal funding.
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. Additionally, the absence of required
information in subrecipient agreements increases the risk of noncompliance with Federal grant
requirements and improper use of Federal funds.Questioned Costs: None noted.
Identification as a Repeat Finding, if Applicable: Finding 2023-004
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. Furthermore,
Astraea should implement enhanced review procedures to ensure all subrecipient agreements
include the required information before execution, such as, updating standard agreement templates.
Finding 2024-004: Unallowable Costs / Cash Management (Material Weakness)
Information on the Federal Programs: Assistance Listing Number 98.001
Criteria: According to Uniform Guidance (2 CFR 200.305(b)), Federal funds must be managed in a
way that minimizes the time elapsing between the transfer of funds and the Organization’s
disbursement of those funds for program purposes. Additionally, internal controls over cash
management should ensure that all drawdowns are approved by designated personnel to prevent
improper or premature use of Federal funds. Furthermore, per 2 CFR 200.414(c), indirect costs may
only be charged to a Federal program if an approved indirect cost rate or a direct cost allocation
methodology is in place and if the Federal award allows for indirect cost recovery.
Condition: During our review of Federal grant drawdowns, it was noted that several drawdowns were
processed without obtaining the required internal approvals as outlined in Astraea's cash
management policies and procedures.
We also noted that several draws included indirect costs, despite the Federal award agreement
explicitly prohibiting indirect cost recovery. While these costs were later removed and ultimately not
charged to the Federal program, their inclusion initially led to an overdraw of funds exceeding the
program’s actual needs. Furthermore, Astraea is carrying a large refundable advance balance.
Cause: Astraea’s cash management procedures were not consistently followed, leading to missed
approvals for certain drawdowns and delays in fund disbursement. Additionally, the lack of approval
led to errors in charging indirect costs to the program.Effect: Drawdowns without proper internal approval increase the risk of non-compliance with Federal
cash management requirements and could result in unauthorized or inaccurate fund usage.
Additionally, charging unallowable indirect costs to the program resulted in noncompliance with
Federal regulations. Furthermore, the delay in disbursing Federal funds increases the risk of
noncompliance with cash management requirements, potentially resulting in interest liability.
Questioned Costs: None noted.
Identification as a Repeat Finding, if Applicable: Finding 2023-005
Recommendation: Astraea should reinforce cash management controls by ensuring all Federal
drawdowns obtain the appropriate internal approvals before processing. This can be achieved by
implementing a checklist or automated workflow to verify compliance with approval requirements.
Astraea should also strengthen internal controls over cost allocation to prevent unallowable indirect
charges. Additionally, we recommend Astraea implement procedures to ensure that Federal funds
are disbursed promptly in accordance with 2 CFR 200.305 to avoid undue delays.
Finding 2024-002: Time Tracking and Payroll Allocations (Material Weakness)
See Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a))
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: As part of our audit procedures around payroll, we noted instances of payroll allocations
to programs which did not accurately represent the time worked and/or salary rate of the employee.
While misallocations were not significant in their amounts, the errors themselves suggest the need
for more detailed review of the payroll allocation approval and entry process.
Cause: The review of the payroll allocation entry and process was not sufficient to catch the errors.
Context: The misallocations identified represent 10% of the sampled employees (4 out of 40).
Although the majority of payroll allocations were supported by appropriate documentation, these four
exceptions suggest a need for improved controls over time and effort reporting to prevent isolated
errors from becoming more systemic issues.
Effect: Astraea could inadvertently mischarge salaries and wages to its various programs.
Questioned Costs: Undetermined.
Identification as a Repeat Finding, if Applicable: Finding 2023-003
Recommendation: We recommend that the finance department perform a more detailed review of
the monthly program allocations to ensure complete and accurate entry of payroll allocations.
Finding 2024-003: Subrecipient Management and Monitoring (Material Weakness)
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. Additionally, per 2 CFR 200.332(a), pass-through entities
must include specific information in subrecipient agreements, such as the Assistance Listing Number
(ALN), compliance requirements, and monitoring responsibilities, to ensure proper oversight and
accountability.
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.
Furthermore, during our review of subrecipient agreements, we noted that certain agreements did not
contain all the required elements as outlined in 2 CFR 200.332(a).
Cause: Astraea did not adhere to its policy in regards to risk assessment procedures. Additionally,
Astraea did not have formalized procedures for ensuring all required elements, including the ALN,
were included in subrecipient agreements.
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. Additionally, during our
review of subrecipient agreements we noted two that did not include the required ALN, which is
necessary to properly identify the source of Federal funding.
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. Additionally, the absence of required
information in subrecipient agreements increases the risk of noncompliance with Federal grant
requirements and improper use of Federal funds.Questioned Costs: None noted.
Identification as a Repeat Finding, if Applicable: Finding 2023-004
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. Furthermore,
Astraea should implement enhanced review procedures to ensure all subrecipient agreements
include the required information before execution, such as, updating standard agreement templates.
Finding 2024-004: Unallowable Costs / Cash Management (Material Weakness)
Information on the Federal Programs: Assistance Listing Number 98.001
Criteria: According to Uniform Guidance (2 CFR 200.305(b)), Federal funds must be managed in a
way that minimizes the time elapsing between the transfer of funds and the Organization’s
disbursement of those funds for program purposes. Additionally, internal controls over cash
management should ensure that all drawdowns are approved by designated personnel to prevent
improper or premature use of Federal funds. Furthermore, per 2 CFR 200.414(c), indirect costs may
only be charged to a Federal program if an approved indirect cost rate or a direct cost allocation
methodology is in place and if the Federal award allows for indirect cost recovery.
Condition: During our review of Federal grant drawdowns, it was noted that several drawdowns were
processed without obtaining the required internal approvals as outlined in Astraea's cash
management policies and procedures.
We also noted that several draws included indirect costs, despite the Federal award agreement
explicitly prohibiting indirect cost recovery. While these costs were later removed and ultimately not
charged to the Federal program, their inclusion initially led to an overdraw of funds exceeding the
program’s actual needs. Furthermore, Astraea is carrying a large refundable advance balance.
Cause: Astraea’s cash management procedures were not consistently followed, leading to missed
approvals for certain drawdowns and delays in fund disbursement. Additionally, the lack of approval
led to errors in charging indirect costs to the program.Effect: Drawdowns without proper internal approval increase the risk of non-compliance with Federal
cash management requirements and could result in unauthorized or inaccurate fund usage.
Additionally, charging unallowable indirect costs to the program resulted in noncompliance with
Federal regulations. Furthermore, the delay in disbursing Federal funds increases the risk of
noncompliance with cash management requirements, potentially resulting in interest liability.
Questioned Costs: None noted.
Identification as a Repeat Finding, if Applicable: Finding 2023-005
Recommendation: Astraea should reinforce cash management controls by ensuring all Federal
drawdowns obtain the appropriate internal approvals before processing. This can be achieved by
implementing a checklist or automated workflow to verify compliance with approval requirements.
Astraea should also strengthen internal controls over cost allocation to prevent unallowable indirect
charges. Additionally, we recommend Astraea implement procedures to ensure that Federal funds
are disbursed promptly in accordance with 2 CFR 200.305 to avoid undue delays.