Audit 411086

(2024-003) Allowable Costs Federal Agency: U.S. Department of Treasury CFDA No.: 21.027 Federal Program: Coronavirus State and Local Fiscal Recovery Funds Federal Award Year: 2024 Control Category: Allowable Costs Questioned Costs: $0 Condition The Center billed $1,014,035 to the State Bar of California for the above mentioned grant during the year ended December 31, 2024. Of the total costs charged, $757,803 was for payroll and benefit costs. The Center provided documentation supporting the employee time charged to the grant. We requested the employee’s personnel action forms to determine if the amount billed to the grant agreed to the employee’s approved salary. The Center was not able to provide personnel action forms. Instead, we reviewed payroll registers to ensure the amount charged to the grant did not exceed the amount paid to the employees. Criteria 2 CFR 200.430(i), Standards for Documentation of Personnel Expenses, states, in part: (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 of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; Cause The Center did not routinely document approval of employee salaries or hourly rates in a personnel action form or other similar form. Effect The internal controls supporting payroll records are not sufficient to provide reasonable assurance that the charges are accurate. Recommendation We recommend that the Center document and retain employee salaries in a personnel action form, or similar form. The documentation should include evidence of approval of the salary or hourly rate. Management Response PLC transitioned to a new HRIS software in mid-2024, which disrupted our usual process for documenting approval of employee salary/pay rates. We have worked with our HR department to incorporate a new procedure for documenting personnel actions that is compatible with our HRIS software.