New York City Housing Preservation & Development (“HPD”) Finding #: 2024-004 Funding Year(s): 7/1/2023 – 6/30/2024 Housing Voucher Cluster: Section 8 Housing Choice Vouchers (FAL #14.871) Contract Numbers: N/A Federal Agency: U.S. Department of Housing and Urban Development Type of Finding: Eligibility and Special Tests and Provisions (Utility Allowance Schedule) - Material Noncompliance and Internal Control (Material Weakness) Criteria: As stipulated by 24 CFR Section 982.201, prior to providing housing assistance payments (HAP) to participants, HPD must verify the eligibility of applicants based on their family income and composition. Per 24 CFR section 982.516, HPD must also reexamine family income and composition for each tenant at least once every 12 months to verify continued eligibility and adjust the HAP amount, as necessary. Further, as stipulated by 24 CFR Section 982.517, HPD must maintain an up-to-date utility allowance schedule and establish procedures to properly apply the updated utility allowances to each tenant’s HAP calculations as part of the annual reexamination process. Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers. Condition/Context: To assess eligibility, HPD’s policy is to conduct annual recertifications of family income and composition. As part of that process, HPD sends a recertification package to the head of household, which contains documentation that the tenant must complete for verification purposes. HPD then analyzes and verifies all information included in the recertification package to determine if the tenant is eligible to continue to receive HAPs and adjust the tenant rent and HAP amounts as necessary for the following 12-month period. We selected a non-statistical sample of forty (40) tenants who received HAPs under the Housing Voucher Cluster during fiscal year 2024. For thirteen (13) of the tenants tested, HPD was not able to provide documentation to support that an eligibility recertification for the tenant, including a review of the utility allowance and HAP calculation, was performed within the previous 12 months, as required. Cause/Effect: While HPD has a process in place to assess the eligibility of tenants receiving HAPs under the Housing Voucher Cluster, the reexamination of family income and composition and utility allowance was not consistently performed at least once every 12 months to support the tenant’s continued eligibility to receive benefits through this program at the appropriate amounts. Questioned Costs: None identified. Identification as a Repeat Finding: This finding is similar to finding #2023-016, included on pages 254 and 255 of the Fiscal 2023 Single Audit report. Recommendation: We recommend that HPD strengthen their internal controls governing the eligibility requirements, including implementing a control to ensure recertifications of family income and composition are performed at least once every 12 months and the tenants HAP amount and tenant utility allowance is adjusted as necessary to meet the eligibility requirements per 24 CFR sections 5.230, 5.609, 982.201 and 982.516.
New York City Housing Preservation & Development (“HPD”) Finding #: 2024-004 Funding Year(s): 7/1/2023 – 6/30/2024 Housing Voucher Cluster: Section 8 Housing Choice Vouchers (FAL #14.871) Contract Numbers: N/A Federal Agency: U.S. Department of Housing and Urban Development Type of Finding: Eligibility and Special Tests and Provisions (Utility Allowance Schedule) - Material Noncompliance and Internal Control (Material Weakness) Criteria: As stipulated by 24 CFR Section 982.201, prior to providing housing assistance payments (HAP) to participants, HPD must verify the eligibility of applicants based on their family income and composition. Per 24 CFR section 982.516, HPD must also reexamine family income and composition for each tenant at least once every 12 months to verify continued eligibility and adjust the HAP amount, as necessary. Further, as stipulated by 24 CFR Section 982.517, HPD must maintain an up-to-date utility allowance schedule and establish procedures to properly apply the updated utility allowances to each tenant’s HAP calculations as part of the annual reexamination process. Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers. Condition/Context: To assess eligibility, HPD’s policy is to conduct annual recertifications of family income and composition. As part of that process, HPD sends a recertification package to the head of household, which contains documentation that the tenant must complete for verification purposes. HPD then analyzes and verifies all information included in the recertification package to determine if the tenant is eligible to continue to receive HAPs and adjust the tenant rent and HAP amounts as necessary for the following 12-month period. We selected a non-statistical sample of forty (40) tenants who received HAPs under the Housing Voucher Cluster during fiscal year 2024. For thirteen (13) of the tenants tested, HPD was not able to provide documentation to support that an eligibility recertification for the tenant, including a review of the utility allowance and HAP calculation, was performed within the previous 12 months, as required. Cause/Effect: While HPD has a process in place to assess the eligibility of tenants receiving HAPs under the Housing Voucher Cluster, the reexamination of family income and composition and utility allowance was not consistently performed at least once every 12 months to support the tenant’s continued eligibility to receive benefits through this program at the appropriate amounts. Questioned Costs: None identified. Identification as a Repeat Finding: This finding is similar to finding #2023-016, included on pages 254 and 255 of the Fiscal 2023 Single Audit report. Recommendation: We recommend that HPD strengthen their internal controls governing the eligibility requirements, including implementing a control to ensure recertifications of family income and composition are performed at least once every 12 months and the tenants HAP amount and tenant utility allowance is adjusted as necessary to meet the eligibility requirements per 24 CFR sections 5.230, 5.609, 982.201 and 982.516.
New York City Department of Health and Mental Hygiene (“DOHMH”) Finding #: 2024-002 Funding Year(s): 8/1/2019-7/31/2024, 8/1/2019-7/31/2026 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (FAL #93.323) Contract Numbers: 5 NU50CK000517, 6 NU50CK000517 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Reporting - Compliance and Internal Control (Significant Deficiency) Criteria: In accordance with the U.S. Department of Health and Human Services (“HHS”) Grants Policy Statement, reports of expenditures are required as documentation of the financial status of grants according to the official accounting records of the recipient. Financial or expenditure reporting is accomplished using the Financial Status Report (“FSR”) (SF 269 or SF 269A). The FSR is required annually, and the report must be submitted for each budget period no later than 90 days after the close of the budget period or applicable 12-month period. Additionally, performance reports are required by the terms and conditions of the federal awards. As stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers. Condition/Context: In the prior year, a significant deficiency in internal controls was identified concerning the lack of sufficient evidence to support the review and approval of performance reports, and the submission of annual FSRs after the required reporting deadline of 90 days following the end of the budget period. For the performance reporting requirements, our inquiries with management during the current year revealed that no improvements were made to the operating effectiveness of this internal control process over compliance. For the FSR reporting requirement, from a non-statistical sample of six (6) annual FSRs subject to testing during fiscal year 2024, we identified four (4) FSRs that were submitted after the required reporting deadline of within 90 days following the end of the budget period. Cause/Effect: Although DOHMH indicated that they have established policies and procedures to ensure the accurate and timely completion and submission of required reports, we observed that appropriate reviews were not consistently performed and documented for both financial and performance reporting to ensure timely submission. Questioned Costs: None noted. Identification as a Repeat Finding: This finding is similar to finding #2023-008, included on pages 238 and 239 of the Fiscal 2023 Single Audit report. Recommendation: We recommend that DOHMH enhance their internal controls over the reporting process by ensuring that all financial and special performance reports undergo documented review and approval before submission within the required timeframe.
New York City Department of Health and Mental Hygiene (“DOHMH”) Finding #: 2024-002 Funding Year(s): 8/1/2019-7/31/2024, 8/1/2019-7/31/2026 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (FAL #93.323) Contract Numbers: 5 NU50CK000517, 6 NU50CK000517 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Reporting - Compliance and Internal Control (Significant Deficiency) Criteria: In accordance with the U.S. Department of Health and Human Services (“HHS”) Grants Policy Statement, reports of expenditures are required as documentation of the financial status of grants according to the official accounting records of the recipient. Financial or expenditure reporting is accomplished using the Financial Status Report (“FSR”) (SF 269 or SF 269A). The FSR is required annually, and the report must be submitted for each budget period no later than 90 days after the close of the budget period or applicable 12-month period. Additionally, performance reports are required by the terms and conditions of the federal awards. As stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers. Condition/Context: In the prior year, a significant deficiency in internal controls was identified concerning the lack of sufficient evidence to support the review and approval of performance reports, and the submission of annual FSRs after the required reporting deadline of 90 days following the end of the budget period. For the performance reporting requirements, our inquiries with management during the current year revealed that no improvements were made to the operating effectiveness of this internal control process over compliance. For the FSR reporting requirement, from a non-statistical sample of six (6) annual FSRs subject to testing during fiscal year 2024, we identified four (4) FSRs that were submitted after the required reporting deadline of within 90 days following the end of the budget period. Cause/Effect: Although DOHMH indicated that they have established policies and procedures to ensure the accurate and timely completion and submission of required reports, we observed that appropriate reviews were not consistently performed and documented for both financial and performance reporting to ensure timely submission. Questioned Costs: None noted. Identification as a Repeat Finding: This finding is similar to finding #2023-008, included on pages 238 and 239 of the Fiscal 2023 Single Audit report. Recommendation: We recommend that DOHMH enhance their internal controls over the reporting process by ensuring that all financial and special performance reports undergo documented review and approval before submission within the required timeframe.
New York City Department of Health and Mental Hygiene (“DOHMH”) Finding #: 2024-002 Funding Year(s): 8/1/2019-7/31/2024, 8/1/2019-7/31/2026 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (FAL #93.323) Contract Numbers: 5 NU50CK000517, 6 NU50CK000517 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Reporting - Compliance and Internal Control (Significant Deficiency) Criteria: In accordance with the U.S. Department of Health and Human Services (“HHS”) Grants Policy Statement, reports of expenditures are required as documentation of the financial status of grants according to the official accounting records of the recipient. Financial or expenditure reporting is accomplished using the Financial Status Report (“FSR”) (SF 269 or SF 269A). The FSR is required annually, and the report must be submitted for each budget period no later than 90 days after the close of the budget period or applicable 12-month period. Additionally, performance reports are required by the terms and conditions of the federal awards. As stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers. Condition/Context: In the prior year, a significant deficiency in internal controls was identified concerning the lack of sufficient evidence to support the review and approval of performance reports, and the submission of annual FSRs after the required reporting deadline of 90 days following the end of the budget period. For the performance reporting requirements, our inquiries with management during the current year revealed that no improvements were made to the operating effectiveness of this internal control process over compliance. For the FSR reporting requirement, from a non-statistical sample of six (6) annual FSRs subject to testing during fiscal year 2024, we identified four (4) FSRs that were submitted after the required reporting deadline of within 90 days following the end of the budget period. Cause/Effect: Although DOHMH indicated that they have established policies and procedures to ensure the accurate and timely completion and submission of required reports, we observed that appropriate reviews were not consistently performed and documented for both financial and performance reporting to ensure timely submission. Questioned Costs: None noted. Identification as a Repeat Finding: This finding is similar to finding #2023-008, included on pages 238 and 239 of the Fiscal 2023 Single Audit report. Recommendation: We recommend that DOHMH enhance their internal controls over the reporting process by ensuring that all financial and special performance reports undergo documented review and approval before submission within the required timeframe.
New York City Administration for Children’s Services (“ACS”) and New York City Department of Education (“DOE”) Finding #: 2024-003 Funding Year(s): 4/1/2023 - 9/30/2024 CCDF Cluster: Child Care and Development Block Grant (FAL #93.575) Contract Numbers: 23-OCFS-LCM-12-R3 Pass-Through Agency: NYS Office of Children and Family Services Federal Agency: U.S. Department of Health and Human Services Type of Finding: Eligibility - Material Noncompliance and Internal Control (Material Weakness) Criteria: As stipulated by the 45 CFR Part 98 Subpart C, to be eligible for services under the Child Care and Development Block Grant (“CCDBG”), a child shall (1) be under the age of thirteen (13) years of age or be under the age of nineteen (19) and physically or mentally incapable of caring for himself or herself; (2) Reside with a family whose income does not exceed 85 percent of the State's median income (SMI) and whose family assets do not exceed $1,000,000; and (3) reside with a parent or parents who are working or attending a job training or educational program; or receive, or need to receive, protective services. Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers. Condition/Context: We selected a non-statistical sample of forty (40) individuals who received services under CCDBG during fiscal year 2024 and found that seven (7) of the individuals tested had errors, detailed as follows: • One (1) of the individuals tested from DOE did not meet some or all of the eligibility criteria as stipulated in 45 CFR Part 98 Subpart C; • For six (6) of the individuals tested, ACS paid for hours of care that exceeded the number of hours of care that the individual was eligible to receive based on the authorized hours determined during the eligibility approval process. Total CCDBG Benefits charged to the grant were $813,778,977 and total CCDBG benefits subjected to testing were $36,043. Cause/Effect: While ACS and DOE have a process in place to assess the eligibility of children, a comprehensive review was not consistently performed and documented to ensure the appropriate evidence and related approvals were maintained to support those determinations. This was due to a lack of a process ensuring enrollment and payment for services on behalf of the children were based on and agreed to the authorized hours determined during the eligibility review process. As a result, costs were incurred on behalf of certain children that did not meet all of the eligibility requirements, were not supported by appropriate documentation, or had errors in authorized hours. Questioned Costs: Known questioned costs of $4,199. Identification as a Repeat Finding: This finding is similar to finding #2023-013, included on pages 248 and 249 of the Fiscal 2023 Single Audit report. Recommendation: We recommend that ACS and DOE enhance their internal controls for eligibility requirements. This includes implementing a review checklist to ensure each child meets all eligibility criteria as outlined in 45 CFR Part 98 Subpart C during the eligibility determination process.
New York City Administration for Children’s Services (“ACS”) and New York City Department of Education (“DOE”) Finding #: 2024-003 Funding Year(s): 4/1/2023 - 9/30/2024 CCDF Cluster: Child Care and Development Block Grant (FAL #93.575) Contract Numbers: 23-OCFS-LCM-12-R3 Pass-Through Agency: NYS Office of Children and Family Services Federal Agency: U.S. Department of Health and Human Services Type of Finding: Eligibility - Material Noncompliance and Internal Control (Material Weakness) Criteria: As stipulated by the 45 CFR Part 98 Subpart C, to be eligible for services under the Child Care and Development Block Grant (“CCDBG”), a child shall (1) be under the age of thirteen (13) years of age or be under the age of nineteen (19) and physically or mentally incapable of caring for himself or herself; (2) Reside with a family whose income does not exceed 85 percent of the State's median income (SMI) and whose family assets do not exceed $1,000,000; and (3) reside with a parent or parents who are working or attending a job training or educational program; or receive, or need to receive, protective services. Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers. Condition/Context: We selected a non-statistical sample of forty (40) individuals who received services under CCDBG during fiscal year 2024 and found that seven (7) of the individuals tested had errors, detailed as follows: • One (1) of the individuals tested from DOE did not meet some or all of the eligibility criteria as stipulated in 45 CFR Part 98 Subpart C; • For six (6) of the individuals tested, ACS paid for hours of care that exceeded the number of hours of care that the individual was eligible to receive based on the authorized hours determined during the eligibility approval process. Total CCDBG Benefits charged to the grant were $813,778,977 and total CCDBG benefits subjected to testing were $36,043. Cause/Effect: While ACS and DOE have a process in place to assess the eligibility of children, a comprehensive review was not consistently performed and documented to ensure the appropriate evidence and related approvals were maintained to support those determinations. This was due to a lack of a process ensuring enrollment and payment for services on behalf of the children were based on and agreed to the authorized hours determined during the eligibility review process. As a result, costs were incurred on behalf of certain children that did not meet all of the eligibility requirements, were not supported by appropriate documentation, or had errors in authorized hours. Questioned Costs: Known questioned costs of $4,199. Identification as a Repeat Finding: This finding is similar to finding #2023-013, included on pages 248 and 249 of the Fiscal 2023 Single Audit report. Recommendation: We recommend that ACS and DOE enhance their internal controls for eligibility requirements. This includes implementing a review checklist to ensure each child meets all eligibility criteria as outlined in 45 CFR Part 98 Subpart C during the eligibility determination process.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: 21.023, 21.027 Programs: COVID-19 Emergency Rental Assistance Program, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award/Pass-Through Entity Identifying Numbers: COVID-19 HCS-21-37-2103-018(7), HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – personal services: (g) Standards for Documentation of Personnel Expenses. (vii) “Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Per 2 CFR §200.465 Rental Costs of Real Property and Equipment: (b) “Rental costs under ‘sale and lease back’ arrangements are allowable only up to the amount that would have been allowed if the recipient or subrecipient had continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance. (c) Rental costs under “less-than-arm's-length” leases are allowable only up to the amount described in paragraph (b) of this section. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement can control or substantially influence the actions of the other...” Condition: Policies and procedures were not adequately established to ensure allowability of rent charges and other cross-charges to federally funded programs. We noted the Organization’s subsidiary charges rent to the Organization’s programs to utilize office spaces for their operations and cross-charges certain other miscellaneous costs. The rent and certain other costs are based on budgeted costs plus a market rate, which is an unallowable method under the Uniform Grant Guidance. Since these transactions are less-than-arm’s-length due to the Organization’s control and significant influence over its subsidiary, costs charged should be based on actual costs incurred. • For the COVID-19 Emergency Rental Assistance Program: o 1 out of 25 selections was charged based on a market rate and budgeted costs. This selection was for a rent expense. • Allocated cost pool of IT costs: o 2 out of 25 selections were charged based on a market rate and/or budgeted costs. One of the selections was for a rent expense and the other was for building maintenance performed by an employee. Cause: The Organization’s policies and procedures lacked a step to reconcile and/or true-up budget and market rates to actual expenditures. Effect or Potential Effect: Without adequate controls in place to ensure expenditures represent actual costs, the Organization could incorrectly charge expenditures to the Federal program, or not request the appropriate reimbursement the Organization is entitled to under the grant. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. • For the COVID-19 Emergency Rental Assistance Program, nonpayroll costs were $1,166,466 and rent charged to the program was $12,743. • IT costs are accumulated and allocated to grants on an allowable basis. The total IT cost pool was $759,731,which was allocated across all programs (federal and nonfederal). Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: We recommend that the Organization implements policies and procedures to timely reconcile and, if necessary, true-up rent charges to actual expenditures incurred. Views of Responsible Officials: Management agrees with the finding. Management is updating procedures for how certain costs are cross-charged to federal programs.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.
Federal Agencies: Department of the Treasury Federal Assistance Listing Numbers: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Programs: 21.027 Award/Pass-Through Entity Identifying Numbers: HCS-23-AR-2111-018, ARPA - HCS-22-AR-2104-018, COVID-19 - EL-22-AR-27-018, ARPA - EL-22-AR-35-018(1), ARPA - EL-21-AR-03-018(4), ARPA - EL-21-AR-04-018(5), ARPA - EL-22-AR-29-018(2), ARPA - HS-21-AR-01-018(2), BH-22-AR-02-018(1), HCS-23-67-2301-018, HCS-23-AR-2107-018, ARP – 19911, CRF-2024-01, Agreement, 3733, COVID-19 – Agreement, K501, K4893, K4786, K4560, K4862 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (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; (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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) [Reserved] (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.” Condition: We noted that the Organization allocated payroll expenditures using timecards that were not fully reviewed and approved. Two out of 43 selections for the Coronavirus State and Local Fiscal Recovery Funds program did not have employee and/or supervisor approvals. Cause: The Organization did not have adequate policies/procedures in place to ensure timesheet allocations are obtained for all employees charging time to federal grants and that they are appropriately reviewed. Effect or Potential Effect: Without adequate controls to ensure that costs allocated to federal programs are supported, the Organization could incorrectly charge expenditures to the federal program. Questioned Costs: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Organization’s compliance with specified requirements not using a statistically valid sample. Payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds program were $1,320,137 in fiscal year 2024. Any costs not adequately supported by approved timesheet or subsequent attestation are considered questioned costs. Identification as a Repeat Finding: No similar finding noted in the prior year. Recommendation: The Organization should consistently obtain and retain timesheet approvals from both employees and supervisors for each pay period requested for reimbursement. Subsequent attestations of time worked should be timely obtained if detective controls identify missing timesheet approvals. Views of Responsible Officials: Management agrees with the finding. Management is updating and implementing mitigating controls to ensure approvals are sufficiently documented.