2025-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Special Education Cluster: Special Education Grants to States: IDEA Part B ALN: 84.027 Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430, which requires that records accurately reflect the work performed and support the distribution of compensation among activities. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if employees work on more than one Federal award, or a Federal award and non-Federal award. The preparation of payroll verification forms, or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in some instances, the District’s payroll verification forms did not accurately reflect the actual allocation that was charged to the grant in order to comply with Subpart I, 2 CFR §200.430. Cause: Employee payroll verification forms should accurately reflect time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries, and other forms of compensation charged to a federal program. During our audit testing, we noted that some of the District’s payroll verification forms did not indicate the correct amount or percentage allocation for the employee that was charged to the grant. Effect: Inadequate documentation could result in incorrect amounts for salaries and wages being charged to Federal awards. Questioned Costs: The dollar amount was undetermined as some payroll verification forms were not aligned to the grant budget amount. Context: For the Special Education Cluster, based on a sample of twenty-four (24) payroll transactions, we noted that nine (9) payroll transactions were not supported with payroll verification forms that reflected the amount charged to the grant. Identification of a Repeat Finding: This is a repeat finding from the previous audit referenced 2024-001, related to the Special Education Cluster. Recommendation: The District should prepare and maintain the appropriate documentation to support salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. Views of Responsible Officials of Auditee: The District acknowledges the finding and will thoroughly review and maintain all payroll verification forms to ensure the amount charged to the grant corresponds to the federal program to which the employees’ earnings were allocated, based on time and effort, in compliance with Subpart I, 2 CFR §200.430.
2025-002. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Education Stabilization Funds COVID 19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430, which requires that records accurately reflect the approved and authorized work performed, and support the distribution of compensation among activities. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employees work on more than one Federal award, or a Federal award and non-Federal award. The preparation of payroll verification forms, or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in one instance, the District’s payroll verification form was not reviewed or signed by either the supervisor or employee that was charged to the grant in order to comply with Subpart I, 2 CFR §200.430. Cause: Employee payroll verification forms should accurately reflect time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries and other forms of compensation charged to a federal program. During our audit testing, we noted that one of the District’s payroll verification forms was not signed off by either the supervisor or employee. Effect: Payroll verification forms that are not signed or approved could result in compliance risk due to unsupported salaries and wages not being reviewed and charged to Federal awards correctly. Questioned Costs: The dollar amount was undetermined as the payroll verification form was not signed by the supervisor or employee. Context: For Education Stabilization Funds, based on a sample of nineteen (19) payroll transactions, we noted one (1) payroll transaction did not have a payroll verification form that was signed by either the supervisor or employee. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should prepare, maintain, and have the proper employee signoffs and supervisor approvals for the appropriate documentation to support salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. Views of Responsible Officials of Auditee: The District acknowledges the finding and will thoroughly review and maintain the payroll verification forms to ensure each employee’s salary, or other forms of compensation are properly approved and signed off by both the supervisor and employee to comply with Subpart I, 2 CFR §200.430.
2025-003. Payroll and Disbursement (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Special Education Cluster: Special Education Grants to States: IDEA Part B ALN: 84.027 Education Stabilization Funds COVID 19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U Criteria: Ensure that costs charged to federal awards are allowable, reasonable, and allocable in accordance with terms and conditions of the federal award and the approved grant budget, and maintain a financial management system that provides accurate, current, and complete disclosure of expenditures charged to federal awards prescribed by Subpart E, 2 CFR §200.403 through §200.405 and §200.430, and Subpart D, 2 CFR §200.302. Condition: As required under Subpart E, 2 CFR §200.403 through §200.405 and §200.430, and Subpart D, 2 CFR §200.302, which require a financial management system to provide effective control over accountability for federal funds, and to identify the source and application of funds. During the year, we noted that the District recorded journal entries transferring payroll and disbursement related expenditures from the General Fund to the Special Aid Fund under the Special Education Cluster and Education Stabilization Funds grant codes. These journal entries lacked adequate supporting documentation to demonstrate approvals and if the costs were allowable and allocable to the applicable federal awards. Consequently, we were unable to obtain sufficient appropriate audit evidence to conclude whether the journalized transactions were properly charged to the federal programs in order to comply with Subpart E, 2 CFR §200.403 through §200.405 and §200.430, and Subpart D, 2 CFR §200.302. Cause: All journalized transactions should include adequate supporting documentation to substantiate the transfer of funds, especially when recorded to federal awards, as prescribed in Subpart E, 2 CFR §200.430 and Subpart D, 2 CFR §200.302. During the current year, we noted the District did not consistently retain or attach original source documentation to journal entries reallocating General Fund expenditures to the Special Aid Fund. Additionally, internal controls were not in place to ensure that such journal entries were reviewed to confirm allowability, reasonableness, allocability, and compliance with the approved budgets for the Special Education Cluster and Education Stabilization Funds prior to being posted, as required by Subpart E, 2 CFR §200.403 through §200.405 and §200.430, and Subpart D, 2 CFR §200.302. Effect: Due to the lack of supporting documentation and approvals, there is an increased risk that unallowable or unsupported costs may have been charged to the Special Education Cluster and Education Stabilization Funds and included in reimbursement requests. As a result, the District could be subject to disallowed costs and potential repayment to the grantor agencies, if costs are determined to be unallowable. Questioned Costs: The dollar amount was undetermined at the time of the audit due to insufficient documentation to support the allowability of the journalized expenditures. Context: For the Special Education Cluster and the Education Stabilization Funds, based on a sample of journal entries, we noted instances where supporting documentation was insufficient. For the Special Education Cluster, one (1) of three (3) journal entries lacked adequate documentation for payroll-related transactions, as original timesheets were not available to verify the employee’s work activity or confirm alignment with the grant’s approved budget. Similarly, for the Education Stabilization Funds, two (2) of three (3) journal entries lacked sufficient supporting documentation. The District did not provide time and effort records for payroll-related transactions or supporting invoices for disbursement transactions, limiting the ability to confirm that these costs were properly documented and consistent with grant requirements. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should implement procedures to ensure all journal entries made that reallocate payroll and disbursement expenditures charged to federal grants are supported by complete and adequate documentation and approvals, including time and effort documentation for payroll, and supporting invoices for disbursements as support for the journal entries in accordance with the requirements of Uniform Guidance at Subpart E, 2 CFR §200.403 through §200.405 and §200.430, and Subpart D, 2 CFR §200.302. Views of Responsible Officials of Auditee: The District acknowledged the finding and noted that procedures have been implemented to prevent recurrence. These procedures are intended to ensure all journal entries contain adequate supporting documentation and approvals, including time and effort records for payroll, and supporting invoices for disbursements. Additionally, documentation will be consistently maintained and reviewed for all payroll and disbursement expenditures reallocated through journal entries and charged to federal grants in compliance with Subpart E, 2 CFR §200.403 through §200.405 and §200.430, and Subpart D, 2 CFR §200.302.