Federal Program Information: Funding Agency: U.S. Department of Education Title: Teacher & School Leader Incentive Program Assistance Listing: 84.374 A Passthrough: N/A Award Year: 2022 Criteria: 2 CFR Chapter I, and Chapter II, Parts 200, 215, 220, 225, and 230 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ? 200.430 Compensation ? personal services (i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensation activities (for IHE, this per the IHE?s definition of IBS); (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee?s salary or wages among 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 (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: The Foundation does not have a system of internal control to accurately track personnel costs when the individual works on more than one program. The Foundation makes a good-faith effort to budget an individual?s time based on their best estimate of the distribution of the employee?s time over the various programs. However, the Foundation?s employees were not required to track their time on a daily basis and identify which program was worked on during that day. The Foundation did not require those employees who are assigned to multiple cost programs to track and certify their time. The Foundation did not ?true-up? actual time versus budgeted time for the various programs during the year. Questioned Costs: None Cause: The Foundation had not implemented a method to track time for employees allocated between multiple program costs and to adjust those costs based on actual time spent on the programs. The Foundation believed that their goodfaithed effort to budget accurately an employee?s time was sufficient to meet the personnel requirements. Since bringing this to the attention of the Foundation, it has implemented a method for employees to properly track their time by program and to square-up their time to actual time on a timely and consistent basis. Effect: The Foundation is not in compliance with Federal regulations related to the grant and could put funding in jeopardy or require the Foundation to reimburse the program. Auditor?s Recommendation: The Foundation should implement internal control policies and procedures which require employees who work under two or more programs to track their time in a method that allows for proper allocation of expenses between those programs. Additionally, the Foundation should implement a process for employees to certify that their time is properly tracked and allocated. Finally, the Foundation should implement a time-frame to adjust budgeted salaries to actual salaries based upon the tracking performed by employees. Responsible official?s view: ? Specific corrective action plan for finding: Dr. Linda Coy in conjunction with James Coy, CFO and Patty Eaton, Business Manager have developed a revised process of collecting T & E data from employees affected by this action. Each affected employee will collect daily activities tied to the percentage of time allocated to their respective positions and submit on a monthly basis to the business office. The business office will calculate the time spent on each project and provide that information back to the employee for adjustment during the following month. The documentation, for each employee that is part of this process will be available to the auditors during the next audit cycle. The HR department will maintain these files for inspection. ? Timeline for completion of corrective action plan: After consultation with the auditors, it was decided that the effective date for implementation is September 1, 2023. ? Employee position(s) responsible for meeting the timeline: Dr. Linda Coy, Three Rivers Education Foundation Director & James L. Coy CFO
Federal Program Information: Funding Agency: U.S. Department of Education Title: Teacher & School Leader Incentive Program Assistance Listing: 84.374 A Passthrough: N/A Award Year: 2022 Criteria: 2 CFR Chapter I, and Chapter II, Parts 200, 215, 220, 225, and 230 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ? 200.430 Compensation ? personal services (i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensation activities (for IHE, this per the IHE?s definition of IBS); (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee?s salary or wages among 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 (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: The Foundation does not have a system of internal control to accurately track personnel costs when the individual works on more than one program. The Foundation makes a good-faith effort to budget an individual?s time based on their best estimate of the distribution of the employee?s time over the various programs. However, the Foundation?s employees were not required to track their time on a daily basis and identify which program was worked on during that day. The Foundation did not require those employees who are assigned to multiple cost programs to track and certify their time. The Foundation did not ?true-up? actual time versus budgeted time for the various programs during the year. Questioned Costs: None Cause: The Foundation had not implemented a method to track time for employees allocated between multiple program costs and to adjust those costs based on actual time spent on the programs. The Foundation believed that their goodfaithed effort to budget accurately an employee?s time was sufficient to meet the personnel requirements. Since bringing this to the attention of the Foundation, it has implemented a method for employees to properly track their time by program and to square-up their time to actual time on a timely and consistent basis. Effect: The Foundation is not in compliance with Federal regulations related to the grant and could put funding in jeopardy or require the Foundation to reimburse the program. Auditor?s Recommendation: The Foundation should implement internal control policies and procedures which require employees who work under two or more programs to track their time in a method that allows for proper allocation of expenses between those programs. Additionally, the Foundation should implement a process for employees to certify that their time is properly tracked and allocated. Finally, the Foundation should implement a time-frame to adjust budgeted salaries to actual salaries based upon the tracking performed by employees. Responsible official?s view: ? Specific corrective action plan for finding: Dr. Linda Coy in conjunction with James Coy, CFO and Patty Eaton, Business Manager have developed a revised process of collecting T & E data from employees affected by this action. Each affected employee will collect daily activities tied to the percentage of time allocated to their respective positions and submit on a monthly basis to the business office. The business office will calculate the time spent on each project and provide that information back to the employee for adjustment during the following month. The documentation, for each employee that is part of this process will be available to the auditors during the next audit cycle. The HR department will maintain these files for inspection. ? Timeline for completion of corrective action plan: After consultation with the auditors, it was decided that the effective date for implementation is September 1, 2023. ? Employee position(s) responsible for meeting the timeline: Dr. Linda Coy, Three Rivers Education Foundation Director & James L. Coy CFO