Audit 361612

Condition: During our review of controls over payroll processing and tracking of time charged to federal awards, we noted that not all employee timecards are approved by their direct supervisor before processing of the bi-weekly payroll. Criteria: Effective internal controls should be in place to review hours worked by all employees and to review hours charged to federal awards to ensure the related expenditure is allowable. Cause: While policies in place require supervisor approval of timecards, the payroll system is not setup to require the electronic supervisor approval before payroll is processed each period. Effect: While we noted no time charged that appeared improper, internal controls over payroll were not properly implemented and could result in errors in employee hours not being detected and corrected in a timely manner. direct supervisor. A statistical sample was not used. There were no questioned costs associated with this finding. Recommendation: We recommend that management review current internal controls over approval of timecards and ensure internal policies are being followed to ensure approval of all timecards. Certain payroll applications allow for system settings that would require approval of hours before processing.

Condition: During our testing of costs charged to the major program, we identified that one pay-date of payroll charges billed to the program for the grant period July 1, 2024 to June 30, 2025 was billed twice in error. We also identified that administrative costs billed to the grant period July 1, 2023 to June 30, 2024 exceeded the maximum allowed as noted in the criteria below. Criteria: Under 2 CFR Part 200, Subpart E -Cost Principles, costs charged to a federal program must meet certain criteria to be allowable including that they be necessary and reasonable for the performance of the federal award. In addition, the grant agreement stipulates that administrative costs charged to the federal award must not exceed 15% of the total budget for each grant period. Cause: The overbilling of one pay-period and administrative costs was caused by a manual error and an oversight when calculating the amount of federal expenditures to bill. Context: Out of a sample of 40 payroll expenditures, we noted 2 instances where the selected payroll charge was billed in 2 consecutive billings. Upon review of the full billing reports, it was determined that the full pay period was billed twice, totaling $24,367. A statistical sample was not used. For administrative costs, review of totals billed for the full grant period demonstrated that administrative costs billed for one grant exceeded 15% by $2,673 which is included in the total questioned costs below. Effect: The deficiency noted above resulted in known and likely questioned cost as costs were not allowable under the terms of the grant agreement and did not comply with the cost principles under 2 CFR Part 200, Subpart E. Questioned Costs: $27,040 Recommendation: We recommend that management review current internal controls over tracking and review of federal grant billings to include a detailed review of all costs included in the billing to ensure their allowability.

Condition: During our review of controls over payroll processing and tracking of time charged to federal awards, we noted that not all employee timecards are approved by their direct supervisor before processing of the bi-weekly payroll. Criteria: Effective internal controls should be in place to review hours worked by all employees and to review hours charged to federal awards to ensure the related expenditure is allowable. Cause: While policies in place require supervisor approval of timecards, the payroll system is not setup to require the electronic supervisor approval before payroll is processed each period. Effect: While we noted no time charged that appeared improper, internal controls over payroll were not properly implemented and could result in errors in employee hours not being detected and corrected in a timely manner. direct supervisor. A statistical sample was not used. There were no questioned costs associated with this finding. Recommendation: We recommend that management review current internal controls over approval of timecards and ensure internal policies are being followed to ensure approval of all timecards. Certain payroll applications allow for system settings that would require approval of hours before processing.

Condition: During our testing of costs charged to the major program, we identified that one pay-date of payroll charges billed to the program for the grant period July 1, 2024 to June 30, 2025 was billed twice in error. We also identified that administrative costs billed to the grant period July 1, 2023 to June 30, 2024 exceeded the maximum allowed as noted in the criteria below. Criteria: Under 2 CFR Part 200, Subpart E -Cost Principles, costs charged to a federal program must meet certain criteria to be allowable including that they be necessary and reasonable for the performance of the federal award. In addition, the grant agreement stipulates that administrative costs charged to the federal award must not exceed 15% of the total budget for each grant period. Cause: The overbilling of one pay-period and administrative costs was caused by a manual error and an oversight when calculating the amount of federal expenditures to bill. Context: Out of a sample of 40 payroll expenditures, we noted 2 instances where the selected payroll charge was billed in 2 consecutive billings. Upon review of the full billing reports, it was determined that the full pay period was billed twice, totaling $24,367. A statistical sample was not used. For administrative costs, review of totals billed for the full grant period demonstrated that administrative costs billed for one grant exceeded 15% by $2,673 which is included in the total questioned costs below. Effect: The deficiency noted above resulted in known and likely questioned cost as costs were not allowable under the terms of the grant agreement and did not comply with the cost principles under 2 CFR Part 200, Subpart E. Questioned Costs: $27,040 Recommendation: We recommend that management review current internal controls over tracking and review of federal grant billings to include a detailed review of all costs included in the billing to ensure their allowability.