Audit 386880

Significant Deficiency in Internal Controls over Compliance for Allowable Costs/Cost Principles U.S. Department of Health and Human Services Passed through Nebraska Department of Health and Human Services Social Services Block Grant AL #93.667 Award #: 2401NETANF, 2501NETANF Criteria: 2 CFR 200.430(g) requires that 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; and be incorporated into the official records of the recipient or subrecipient. Condition: The Organization did not maintain documentation to support payroll timesheet approvals. Cause: During the year, the Organization switched payroll systems. After the switch, the Organization was not able to obtain historical records which included time sheet approval for payroll charged to the award during the year. Policies and procedures were not sufficiently designed to ensure timecard approval reports were retained. Effect or Potential Effect: The Organization did not maintain full documentation to support payroll costs allocated to the grant which may be inaccurate, unallowable, or unsupported. Questioned Costs: None Context: A nonstatistical sample of 6 payroll transactions out of a population of 24 pay periods during the year were reviewed. Repeat Finding: No Recommendation: Management should implement policies and procedures to ensure payroll timecard approval reports are saved.Views of Responsible Official: Management agrees with this finding. During the year, the Organization switched payroll systems and in the process of the switch, the Organization did not realize that documentation for payroll timecard approval would not be able to be accessed after the transition. Going forward, payroll procedures will be updated to incorporate this process and the Organization will maintain documentation of payroll timecard approval to support payroll amounts allocated to the federal award.