Audit 51339

2022-003 Department of Justice Passed through State of South Dakota Department of Public Safety Federal Financial Assistance Listing #16.575 2022-COMBO-VA018, 7/1/2021 ? 6/30/2022; 2023-COMBO-VA023, 7/1/2022 ? 6/30/2023 Crime Victim Assistance Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. b) Be incorporated into the official records of the non-Federal entity. c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d) Encompass both 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. e) Comply with the established accounting policies and practices of the non-Federal entity. f) Support the distribution of the employee?s salary or wages among specific activities or cost objectives. g) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Our testing over payroll expenditures charged to federal program identified nine instances in which percentage of VOCA hours worked per employee timesheet differed from the percentage of VOCA hours charged to the federal program. Cause: The Organization?s internal control process did not detect the errors. Effect: The Organization?s controls did not detect or correct the errors identified, which results in a reasonable possibility that the Organization could submit disallowed costs under the federal awards. Questioned Costs: No questioned costs Context: A nonstatistical sample of 60 expenditures were selected for testing, including 40 payroll transactions out of approximately 300 total payroll transactions, accounting for approximately $54,423 of $494,822 total payroll costs charged to federal program and 20 non-payroll transactions out of approximately 1,160 total nonpayroll transactions, accounting for approximately $26,192 of $244,249 total non-payroll costs charged to the federal program. Repeat Finding from Prior Year: Yes, prior year finding 2021-003 Recommendation: We recommend management to review payroll policies and procedures over the tracking of time and allocation of wages with related program employees. Views of Responsible Officials: Management is in agreement.

2022-003 Department of Justice Passed through State of South Dakota Department of Public Safety Federal Financial Assistance Listing #16.575 2022-COMBO-VA018, 7/1/2021 ? 6/30/2022; 2023-COMBO-VA023, 7/1/2022 ? 6/30/2023 Crime Victim Assistance Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. b) Be incorporated into the official records of the non-Federal entity. c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d) Encompass both 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. e) Comply with the established accounting policies and practices of the non-Federal entity. f) Support the distribution of the employee?s salary or wages among specific activities or cost objectives. g) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Our testing over payroll expenditures charged to federal program identified nine instances in which percentage of VOCA hours worked per employee timesheet differed from the percentage of VOCA hours charged to the federal program. Cause: The Organization?s internal control process did not detect the errors. Effect: The Organization?s controls did not detect or correct the errors identified, which results in a reasonable possibility that the Organization could submit disallowed costs under the federal awards. Questioned Costs: No questioned costs Context: A nonstatistical sample of 60 expenditures were selected for testing, including 40 payroll transactions out of approximately 300 total payroll transactions, accounting for approximately $54,423 of $494,822 total payroll costs charged to federal program and 20 non-payroll transactions out of approximately 1,160 total nonpayroll transactions, accounting for approximately $26,192 of $244,249 total non-payroll costs charged to the federal program. Repeat Finding from Prior Year: Yes, prior year finding 2021-003 Recommendation: We recommend management to review payroll policies and procedures over the tracking of time and allocation of wages with related program employees. Views of Responsible Officials: Management is in agreement.