Allowable Costs/Cost Principles (Significant Deficiency) Federal Agency: U.S. Department of United States Department of Health and Human Services Assistance Listing Number and Title: 93.567 Refugee and Entrant Assistance Voluntary Agency Programs Funding Year: 2024 Criteria - Per the Uniform Guidance 200.430(i) - Compensation - personal services, Standards for Documentation of Personnel Expenses, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements, these records must: * Be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; * Reasonably reflect the total activity for which the employee is compensated by the non-federal entity, not exceeding 100% of compensated activities; * Encompass both federally assisted and all other activities compensated by the non-federal entity on an integrated basis; and * Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 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 the award recipient’s system of internal controls includes processes to review after-the-fact interim charges made to a federal awards based on budget estimates, and that all necessary adjustments be made such that the final amount charged to the federal award is accurate, allowable, and properly allocated. Condition - To ensure compliance with the criteria above the Society requires employees who have compensation budgeted to be charged to this program complete monthly timesheets to support the allocation to the program was based on actual time incurred to the program. In two instances employees were terminated from their roles and timesheets were not completed. Supervisors were able to perform an after the fact validation of their level of effort to verify the amounts charged to the grant. Questioned Costs: None to report. Context - Of the 40 payroll selections tested, two were related to individuals who were terminated and did not complete their final monthly time sheets. Cause - Management did not ensure a final timesheet was completed and reviewed for the two individuals that were terminated during the period. Effect - While we did not note any instances noncompliance, management was required to perform an after the fact validation of the final timesheets for the two employees that terminated during the year. Repeat Finding: No. Recommendation - We recommend strengthening internal controls to ensure that final time sheets are obtained and reviewed by supervisors prior to the termination of employees in order to document the level of effort that should be charged to the grant.