Audit 394753

III. Federal Awards Findings and Questioned Costs Finding 2025-002: Significant Deficiency in Internal Control over Compliance – Allowable Costs; Criteria or specific requirements: 2 CFR §200.430 of the Uniform Guidance requires that charges to federal awards for salaries and wages be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Personnel expenses must be supported by records that accurately reflect the work performed and must reasonably reflect the total activity for which the employee is compensated. These records must also be incorporated into the official records of the organization. Condition/Context: During our testing of payroll expenditures charged to the grant, we noted management performs a periodic review or “lookback” to compare budgeted payroll allocations to actual work performed to ensure that payroll costs charged to federal awards are reasonable and accurate, evidence of the review was not retained. Effect: Without supporting documentation and periodic reconciliation, there is an increased risk that payroll costs charged to federal awards may not accurately reflect work performed. Cause: The University completed a payroll conversion in the current fiscal year that resulted in challenges to locate certain documentation to support these lookbacks. Repeat finding: No. Recommendation: As management completes their payroll implementation, we recommend that management implement procedures to ensure compliance with Uniform Guidance requirements for personnel costs. These procedures should include either the ability for individuals to track time spent on individual grants when completing their timesheet or reflect staff responsible for compliance retain periodic reviews (lookbacks) comparing budgeted payroll allocations to actual work performed to ensure charges to federal awards are reasonable and properly supported. Views of responsible officials: With the implementation of the new UKG Payroll system in January 2026, the timesheet process now systematically reflects the ability for individuals to track time spent on individual grants when completing their timesheet.