Audit 408989

Finding 2025-002: SLFRF Record Retention Criteria: 2 CFR Section 200.334 - Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. Condition: Elevation timecards for employees for the pay period ending 4/3/2025 were not adequately retained during the required three-year period. Questioned Cost: $12,448.47 Cause: Neighborhood Christian Legal Clinic, Inc. did not have the proper internal controls in place to ensure that all required supporting documents were retained during the specified three-year period. Effect: Payroll amounts for the pay period ending 4/3/2025 that were reported to the awarding agency could not be verified through documentation review. Recommendation: We recommend the Clinic review the internal controls over the administration of Federal funds to ensure documentation is created and retained in accordance with Federal and pass-through requirements. Views of responsible officials and planned corrective actions: While this finding resulted in a deficiency, it resulted from the Clinic's transition from tsheets, a Quickbooks payroll platform, to Paycor, which precluded existing controls from being tested in a retired system to which access could not be regained. The Clinic retained the timesheet records the grantor requested but was not able to produce the payroll records requested during the audit when they were part of the retired system. The current Paycor system is testable and maintains the required level of controls, so there is no additional action required to maintain a compliant system. The deficiency resulted merely from an inability to produce and test records from a retired system, not from a lack of controls in that system. Should the new payroll system records be required, all necessary records will be retained and available to access.