Audit 400280

2025-002. 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 Pass-through Entity Number: 0032-25-0875 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. Such documentation must accurately reflect the work performed and support the distribution of compensation among activities. This includes maintaining appropriate personnel activity reports or equivalent documentation to substantiate amounts charged to federal award programs. Condition: One instance within the audit sample where the semi-annual personnel activity report (PAR) supporting the payroll expenditure charged to the federal award was not maintained for an employee. Cause: The employee whose salary was 100% charged to the federal grant had separated from the District in December 2024; as a result, the PAR was not signed prior to their departure. For employees whose salaries are 100% charged to a federal award, a semi-annual PAR is utilized and signed by the employees in January and June of each school year. Due to the timing of the employee’s separation from the District, the semi-annual PAR was not prepared for the employee’s signature prior to their departure. The District did not have procedures in place to ensure signed PARs are obtained from departing employees before they leave employment, or have an immediate supervisor with knowledge of the employee’s work certify the PAR as an alternative. Effect: The lack of documentation supporting the allocation of payroll costs to the federal award could lead to the costs being disallowed and requiring recoupment. Questioned Costs: Amount undetermined. Context: The District’s Business Office generates monthly PARs for certification by employees whose previous month’s wages and salaries were partially allocated to federal awards programs, and semi-annual PARs for employees whose salaries were 100% allocated to one federal grant program; the PARs are given to the employees for their signature. There were 151 payroll checks charged to the IDEA, Part B grant in the 2024-25 fiscal year, an audit sample size of 10% of the population, which equaled 15 payroll transactions, were selected for testing. Condition was noted in one of the 15 sample selections. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should review and enhance its procedures for preparing and obtaining certified PARs in a timely manner, particularly in situations where an employee is anticipated to separate from service. Procedures may be enhanced to obtain required signatures prior to an employee’s departure, or to implement an alternative review and approval process, such as having the employee’s immediate supervisor review and sign the PAR, to ensure payroll costs charged to federal awards are supported by proper documentation. Views of Responsible Officials of Auditee: The District’s management agrees with the finding. The process and procedures for obtaining signed PARs from departing employees will be reviewed and corrected.