2022-001 Compensation for Personal Services (Repeat Finding) Food Insecurity Nutrition Incentive Grants Program ? Assistance Listing Number 10.331 ? Award Period: September 1, 2020 through August 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: During our testing of time and effort records we noted that actual time spent working on different funding sources/cost objectives was not tracked. Instead, percentage of time was documented on the timesheet then multiplied by the number of work hours in the month. Percentage of time did not change from month to month indicating budgeted allocations were used. Criteria: According to 2 CFR Part 200.430(i)(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 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 compensated 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; 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. Additionally, 2 CFR Part 200.430(i)(7) states, For Federal awards of similar purpose activity or instances of approved blended funding, a non-Federal entity may submit performance plans that incorporate funds from multiple Federal awards and account for their combined use based on performance-oriented metrics, provided that such plans are approved in advance by all involved Federal awarding agencies. In these instances, the non-Federal entity must submit a request for waiver of the requirements based on documentation that describes the method of charging costs, relates the charging of costs to the specific activity that is applicable to all fund sources, and is based on quantifiable measures of the activity in relation to time charged. Cause: The Organization used budgeted allocations to charge salaries and wages to Federal awards without documentation of reconciliation after-the-fact to actual time worked on different funding sources/cost objectives. Effect: Costs for salaries and wages were not fully supported by documentation in accordance with 2 CFR Part 200.430. Allowable costs could potentially be overpaid or underpaid or disallowed and required to be paid back to the Federal awarding agency. Recommendation: The Organization should strengthen policies and procedures to support a system of internal control which provides a reasonable assurance that the charges to Federal awards for salaries and wages are accurate, allowable, and properly allocated. This might include: 1. Improving timesheet tracking to charge actual time spent working on different funding sources/cost objectives, or 2. Establishing a process to periodically review after-the-fact interim charges made to Federal awards based on budget estimates, make timely adjustments, and document their reconciliation or 3. If applicable, obtain a waiver from all involved Federal awarding agencies for blended funding and charge costs based on the approved performance plan. Views of Responsible Officials and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.
2022-002 Federal Financial Reporting Food Insecurity Nutrition Incentive Grants Program ? Assistance Listing Number 10.331 ? Award Period: September 1, 2020 through August 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: The Organization failed to submit the required annual SF-425 Federal Financial Report in 2022. Criteria: Per provisions of the award, Grantee must report cost-sharing annually on Form SF-425. Additionally, 2 CFR Part 200.303(a) states, a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Cause: Procedures and controls were insufficient to ensure the annual Form SF-425 was submitted timely. Effect: Failure to report cost-sharing could result in allowable costs being disallowed and required to be paid back to the Federal awarding agency. Recommendation: The Organization should implement policies and procedures to ensure that all financial and special reports are filed timely and accurately and that reports are reviewed and approved by management prior to submission to ensure accurate support for reported amounts. Views of Responsible Officials and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.
2022-001 Compensation for Personal Services (Repeat Finding) Food Insecurity Nutrition Incentive Grants Program ? Assistance Listing Number 10.331 ? Award Period: September 1, 2020 through August 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: During our testing of time and effort records we noted that actual time spent working on different funding sources/cost objectives was not tracked. Instead, percentage of time was documented on the timesheet then multiplied by the number of work hours in the month. Percentage of time did not change from month to month indicating budgeted allocations were used. Criteria: According to 2 CFR Part 200.430(i)(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 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 compensated 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; 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. Additionally, 2 CFR Part 200.430(i)(7) states, For Federal awards of similar purpose activity or instances of approved blended funding, a non-Federal entity may submit performance plans that incorporate funds from multiple Federal awards and account for their combined use based on performance-oriented metrics, provided that such plans are approved in advance by all involved Federal awarding agencies. In these instances, the non-Federal entity must submit a request for waiver of the requirements based on documentation that describes the method of charging costs, relates the charging of costs to the specific activity that is applicable to all fund sources, and is based on quantifiable measures of the activity in relation to time charged. Cause: The Organization used budgeted allocations to charge salaries and wages to Federal awards without documentation of reconciliation after-the-fact to actual time worked on different funding sources/cost objectives. Effect: Costs for salaries and wages were not fully supported by documentation in accordance with 2 CFR Part 200.430. Allowable costs could potentially be overpaid or underpaid or disallowed and required to be paid back to the Federal awarding agency. Recommendation: The Organization should strengthen policies and procedures to support a system of internal control which provides a reasonable assurance that the charges to Federal awards for salaries and wages are accurate, allowable, and properly allocated. This might include: 1. Improving timesheet tracking to charge actual time spent working on different funding sources/cost objectives, or 2. Establishing a process to periodically review after-the-fact interim charges made to Federal awards based on budget estimates, make timely adjustments, and document their reconciliation or 3. If applicable, obtain a waiver from all involved Federal awarding agencies for blended funding and charge costs based on the approved performance plan. Views of Responsible Officials and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.
2022-002 Federal Financial Reporting Food Insecurity Nutrition Incentive Grants Program ? Assistance Listing Number 10.331 ? Award Period: September 1, 2020 through August 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: The Organization failed to submit the required annual SF-425 Federal Financial Report in 2022. Criteria: Per provisions of the award, Grantee must report cost-sharing annually on Form SF-425. Additionally, 2 CFR Part 200.303(a) states, a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Cause: Procedures and controls were insufficient to ensure the annual Form SF-425 was submitted timely. Effect: Failure to report cost-sharing could result in allowable costs being disallowed and required to be paid back to the Federal awarding agency. Recommendation: The Organization should implement policies and procedures to ensure that all financial and special reports are filed timely and accurately and that reports are reviewed and approved by management prior to submission to ensure accurate support for reported amounts. Views of Responsible Officials and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.