Audit 384480

Finding 2023-002: 21.027 - Coronavirus State and Local Fiscal Recovery:COVID-19 Compliance Requirement: Allowable Costs/Cost Principles - Significant Deficiency Criteria: 2 CFR 200.430, subpart I - Compensation-personal service, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assuance that the charges are accurate, allowable, and properly allocated; • Reasonably reflect the total activity for which the employee is compensated; and • Be supported by documentation such as time sheets, time cards, or equivalent records that are approved by a supervisor with firsthand knowledge of the work performed. Condition: During testing of payroll transactions, it was noted that one employee out of eighteen tested charged to the federal award did not have a completed and approved timecard to support payroll costs for the period under review. As a result, the time and effort supporting payroll charges could not be verified. Effect: Without proper time and effort documentation, there is insufficient support to verify that payroll charges to the federal award accurately reflect the time worked on the project. This may result in unallowable costs being charged to the award. Questioned Cost: None Cause: The Organization did not consistently enforce its policy requiring employees to complete and submit time cards for all federally funded payroll costs. Recommendation: Management should ensure that all employees whose salaries are charged to federal awards complete and maintain appropriate time and effort documentation, such as signed time cards or certifications, in accordance with 2 CFR 200.430. Supervisors should review and approve these records regularly to verify the accuracy of payroll charges. Response: Implement procedures to ensure supervisors’ approval of all federally funded timecards by a set deadline. HR will run a “missing timecard report” each pay cycle to ensure time cards are properly completed. Will conduct annual training on federal compliance requirements.