Audit 394022

Type of Finding: a) Significant Deficiencies in Internal Control Over Compliance b) Compliance Finding Criteria: According to 2 CFR, Part 430(i)(l) of the Office of Management and Budget’s Uniform Grant Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; b) Be incorporated into the official records of the non-Federal entity; c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity; d) Encompass both federally assisted and all other activities compensated by the non-Federal entity; e) Support the distribution of the employee’s salary or wages amount 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. Condition: The District employees whose time was being charged to the grants, who were working both 100% and less than 100% of the time in the federal award program, were required to complete semi-annual or monthly certification of the percentage of time they worked in the Federal award program however, they were not completed timely or were not completed correctly. Cause: The School District did not have adequate internal controls in place to ensure that the monthly and semi-annual certifications were being completed by each employee working in the Federal award programs. Effect: Without adequate internal controls over the employee’s time being charged to the grant and the certification requirement, the School District cannot ensure that federal funds are paid in accordance with allowable costs and the time worked in the grant. Additionally, they cannot easily monitor the amount of funds that can be charged to the grant for salaries and benefits. Payments that do not agree with the time worked are unallowable and subject to recover by the grantor. Questioned Costs: Support for the employees’ whose time was charged to the Federal award programs in question was reviewed and it was determined that for all employees the time being charged to the grant was appropriate, therefore, there were no questioned costs. Recommendation: We recommend that the District have proper internal controls in place to ensure that the employees working in the grants are certifying their percent of time and effort that is being spent working in the federal award programs by all employees whose time is charged to the grant and that they are completed in a timely manner. Monthly certifications should be completed if less than 100% of time is being worked in the federal award program or semiannually if 100% of time is being spent.