Management concurs with the finding. During the audit period, the Organization maintained payroll records, compensation documentation, and payroll allocation schedules; however, it did not maintain personnel activity reports, periodic certifications, or other after-the-fact documentation sufficient ...
Management concurs with the finding. During the audit period, the Organization maintained payroll records, compensation documentation, and payroll allocation schedules; however, it did not maintain personnel activity reports, periodic certifications, or other after-the-fact documentation sufficient to support compensation costs charged to the Community Development Financial Institutions Program in accordance with 2 CFR § 200.430. The Organization's methodology relied on management-established allocation percentages based on employee responsibilities and anticipated level of effort supporting CDFI Fund activities. While management believes the costs charged to the award were incurred in support of eligible program activities, the Organization recognizes that documentation supporting the allocation methodology did not meet the standards required under Uniform Guidance. Planned Corrective Action: Beginning July 1, 2026, the Organization will implement formal time and effort reporting procedures for all personnel whose compensation is charged, in whole or in part, to federal awards. Specifically, the Organization will: 1.The CFO will establish a cost allocation plan which includes a methodology to support salary, wage, and fringe benefit charges, and other applicable costs, to the federal award and to support allocation among cost objectives. 2. The CFO will implement a documented process for personnel activity reporting and/or periodic certifications (or other equivalent documentation) that reasonably reflects actual work performed and supports the allocation of compensation costs to eligible activities. 3. CFO will reconfigure the current workforce management system to ensure projects, departments, and contextual details are logged at the source. 4. The COO will review existing timesheet submission and review policy to ensure compliance with federal requirements. The policy will require supervisory review and approval of personnel activity documentation/ certifications consistent with the payroll cadence and retain documentation in the grant file and/or payroll file. The CFO will review and enforce compliance with timesheet submission requirements. 5. The CFO will implement a dynamic allocations module within Sage Intacct to facilitate automated allocation of time and fringe benefits to federal and other programs. 6. The CFO will ensure that the systems established perform periodic reconciliation and after-thefact review of payroll and fringe benefit allocations. The CFO will make timely adjustments when actual activity differs from budget estimates or planned allocations. 7. The CFO, COO, and other personnel working on federal programs will receive training on the documentation standards in 2 CFR § 200.430 and allowability factors in 2 CFR § 200.403. 8. The CFO and COO will provide training to program and finance personnel on the documentation standards. in 2 CFR § 200.430 and allowability factors in 2 CFR § 200.403. 9. The CFO will, as part of the monthly close process, review compensation charged to federal awards to ensure all costs are appropriate and supported prior to requesting reimbursement. Management believes these actions will strengthen internal controls over compensation costs charged to federal awards and ensure compliance with Uniform Guidance requirements going forward. Responsible Official: Julia Gazizova, Chief Financial Officer Anticipated Completion Date: September 30, 2026.