Audit 382405

Finding 2025-001 – Allowable Costs (Significant Deficiency and Noncompliance) Information on the Federal Program: U.S. Department of Education, TRIO Cluster Criteria: 2 CFR 200 Subpart E establishes cost principles to apply in determining costs under federal awards. Nonfederal entities are also required to establish controls over the disbursement process to ensure compliance with allowable cost requirements. Condition: We selected a sample of 25 payroll charges, containing 57 employees. Of those 57, 2 exceptions were noted related to documentation. One employee’s last letter of appointment indicated the position was 100% TRIO; however, the employee was allocated only at 50%, and their new allocation was not documented in a new letter of appointment. And one employee had more than one position but the additional position added letter of appointment or change of status was not provided. Cause: The College has established policies and procedures to prepare letters of appointment and change of status forms to ensure payroll is properly documented as to amount and funding source. These forms are approved by the College President. Letters of appointment were not updated per policy to align with actual grant charges and other records such as emails and spreadsheets were provided contemporaneously to support the allowability of the costs. Effect: Key controls over payroll documentation and adherence to policies and procedures were not operating effectively. Questioned Costs: none Recommendation: We recommend the College adhere to its policies and procedures surrounding the payroll process. Payroll costs funded by federal funds should be adequately documented as to allowability and employees’ total pay documented, reviewed and approved. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.