2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
2022-004: Significant Deficiency in Internal Control / Immaterial Noncompliance – Activities Allowed/Allowable Costs (repeat comment) Federal Program: WIOA Cluster (ALN 17.258/17.259/17.278), Employment Services Cluster (ALN 17.207/17.801), and Temporary Assistance for Needy Families Cluster (ALN 93.558) Criteria: Per 2 CFR 200.405, Allocable costs (a) states “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Context: Allocations of non-direct charged wage time (i.e., paid time off, bereavement, jury duty, holiday, medical paid time off, medical waivers) are managed through a labor allocation which is completed by the accounting staff and communicated to the payroll company. This labor allocation is designed to spread the non-direct charged wage time to the same programs that the employee directly charges time. When an employee changes programs to which their time is directly charged the accounting staff is not notified by the staff but notes the change after the fact during reviews of payroll records. Once the change is noted, a new labor allocation is created and communicated to the payroll company which creates a lag in time whereby amounts of non-direct charged wage time are charged to various programs incorrectly. Cause: Limitation of current system being utilized to allocate payroll costs. Effect: Costs charged to the program may be considered unallowable if not allocated in a manner consistent with where the employee actually spends their time. Recommendation: The Consortium should adopt policies and procedures that require that allocations for labor to align with how the employee actually spends their time. Views of Responsible Officials: We agree with the finding. We have addressed the issues within the Consortium to properly allocate non-direct wage time.
Finding 2022-001: Significant Deficiency – Allowable Costs/Cost Principles Repeat Finding: 2021-001 Organization did not implement an established and accurate cost allocation plan during the fiscal year ending June 30, 2022. Therefore, not all costs were shared among different grants consistently and accurately. Criteria: Under the U.S. Code of Federal Regulations (CFR), Title 2: Grants and Agreements, PART 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart E - Cost Principles Sec. 200.405 Allocable Costs - the cost must be allocated to the grants/projects based on the proportional benefit. If a cost benefits two or more grants/projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on a reasonable documented basis. Condition: During our prior year audit as well as during a monitoring visit by PDE, it was discovered that certain expenses were allocated to grants on an unsupported basis. Based on testing of expenditures performed for current year an accurate cost allocation plan was not accurately developed or implemented during the fiscal year ended June 30, 2022. Questioned Costs: None Cause: The Organization did not create or implement an accurate cost allocation plan during the current or prior or fiscal year. Effect: DCLC is not in compliance with 2 CFR Sec. 200.405 - Allocable Costs. Recommendation: We recommend that DCLC work to develop and implement a written allocation plan including calculations for all direct and indirect costs that benefit two or more grants or programs. Specifically, DCLC should review actual expenses on an ongoing basis and make any necessary adjustments to the allocated expenses.
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Federal Agencies: Department of Justice; Department of the TreasuryProgram Titles: Crime Victim Assistance; Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 16.575; 21.027Award Numbers: 22-31219-018, 22-31310-140, 22-31219-019, F19-31219-553, 8152, DA-239Award Periods: VariousCriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles.Condition/Context for EvaluationDuring our audit we identified that a total of 19 of 142 transactions (79 non-payroll transactions and 63 for payrolltransactions) tested for allowable costs and activities did not meet the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsSubpart E - Cost Principles. Below is a disaggregation of the exceptions identified:- Thirteen of the non-payroll transactions tested did not have documentation available to support the allocationof the expense to the program in accordance with 2 CFR 200.405.- Three of the non-payroll transactions tested did not meet the reasonable and necessary criteria of 2 CFR200.403.- Two of the payroll transactions tested was charged to the federal award based upon allocations determinedbefore services were performed with no process to identify significant changes in the corresponding workactivity in accordance with 2 CFR 200.430(i).- Two of the transactions tested did not have adequate documentation to support the item of cost in accordancewith the criteria at 200.403(g).- One of the transactions tested the cost incurred represented a reimbursement for costs in excess of theallowable amount per the Organization?s policies and procedures and did not meet the criteria of 2 CFR 200.403.Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged costs to the federal awards that were unallowable. Questioned CostsActual questioned costs identified during the audit totaled the amounts below by award:Assistance Pass-Through KnownListing Pass-Through Award QuestionedNumber Funder Number Costs21.027 State of Oregon Department of Administrative Services 8152 $ 1921027 King County Regional Homelessness Authority DA-239 $ 3,808CauseInternal controls were not operating effectively to ensure only allowable costs were charged to the federal awards.Repeat FindingNot applicable.RecommendationWe recommend that the Organization provide additional training to employees to ensure that controls operate effectivelyso that only allowable costs are authorized to be charged to federal awards and that record retention controls arestrengthened to ensure documentation and policies are retained to support the distribution of charges between projects.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Federal Agencies: Department of Justice; Department of the TreasuryProgram Titles: Crime Victim Assistance; Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 16.575; 21.027Award Numbers: 22-31219-018, 22-31310-140, 22-31219-019, F19-31219-553, 8152, DA-239Award Periods: VariousCriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles.Condition/Context for EvaluationDuring our audit we identified that a total of 19 of 142 transactions (79 non-payroll transactions and 63 for payrolltransactions) tested for allowable costs and activities did not meet the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsSubpart E - Cost Principles. Below is a disaggregation of the exceptions identified:- Thirteen of the non-payroll transactions tested did not have documentation available to support the allocationof the expense to the program in accordance with 2 CFR 200.405.- Three of the non-payroll transactions tested did not meet the reasonable and necessary criteria of 2 CFR200.403.- Two of the payroll transactions tested was charged to the federal award based upon allocations determinedbefore services were performed with no process to identify significant changes in the corresponding workactivity in accordance with 2 CFR 200.430(i).- Two of the transactions tested did not have adequate documentation to support the item of cost in accordancewith the criteria at 200.403(g).- One of the transactions tested the cost incurred represented a reimbursement for costs in excess of theallowable amount per the Organization?s policies and procedures and did not meet the criteria of 2 CFR 200.403.Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged costs to the federal awards that were unallowable. Questioned CostsActual questioned costs identified during the audit totaled the amounts below by award:Assistance Pass-Through KnownListing Pass-Through Award QuestionedNumber Funder Number Costs21.027 State of Oregon Department of Administrative Services 8152 $ 1921027 King County Regional Homelessness Authority DA-239 $ 3,808CauseInternal controls were not operating effectively to ensure only allowable costs were charged to the federal awards.Repeat FindingNot applicable.RecommendationWe recommend that the Organization provide additional training to employees to ensure that controls operate effectivelyso that only allowable costs are authorized to be charged to federal awards and that record retention controls arestrengthened to ensure documentation and policies are retained to support the distribution of charges between projects.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Federal Agencies: Department of Justice; Department of the TreasuryProgram Titles: Crime Victim Assistance; Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 16.575; 21.027Award Numbers: 22-31219-018, 22-31310-140, 22-31219-019, F19-31219-553, 8152, DA-239Award Periods: VariousCriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles.Condition/Context for EvaluationDuring our audit we identified that a total of 19 of 142 transactions (79 non-payroll transactions and 63 for payrolltransactions) tested for allowable costs and activities did not meet the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsSubpart E - Cost Principles. Below is a disaggregation of the exceptions identified:- Thirteen of the non-payroll transactions tested did not have documentation available to support the allocationof the expense to the program in accordance with 2 CFR 200.405.- Three of the non-payroll transactions tested did not meet the reasonable and necessary criteria of 2 CFR200.403.- Two of the payroll transactions tested was charged to the federal award based upon allocations determinedbefore services were performed with no process to identify significant changes in the corresponding workactivity in accordance with 2 CFR 200.430(i).- Two of the transactions tested did not have adequate documentation to support the item of cost in accordancewith the criteria at 200.403(g).- One of the transactions tested the cost incurred represented a reimbursement for costs in excess of theallowable amount per the Organization?s policies and procedures and did not meet the criteria of 2 CFR 200.403.Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged costs to the federal awards that were unallowable. Questioned CostsActual questioned costs identified during the audit totaled the amounts below by award:Assistance Pass-Through KnownListing Pass-Through Award QuestionedNumber Funder Number Costs21.027 State of Oregon Department of Administrative Services 8152 $ 1921027 King County Regional Homelessness Authority DA-239 $ 3,808CauseInternal controls were not operating effectively to ensure only allowable costs were charged to the federal awards.Repeat FindingNot applicable.RecommendationWe recommend that the Organization provide additional training to employees to ensure that controls operate effectivelyso that only allowable costs are authorized to be charged to federal awards and that record retention controls arestrengthened to ensure documentation and policies are retained to support the distribution of charges between projects.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Federal Agencies: Department of Justice; Department of the TreasuryProgram Titles: Crime Victim Assistance; Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 16.575; 21.027Award Numbers: 22-31219-018, 22-31310-140, 22-31219-019, F19-31219-553, 8152, DA-239Award Periods: VariousCriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles.Condition/Context for EvaluationDuring our audit we identified that a total of 19 of 142 transactions (79 non-payroll transactions and 63 for payrolltransactions) tested for allowable costs and activities did not meet the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsSubpart E - Cost Principles. Below is a disaggregation of the exceptions identified:- Thirteen of the non-payroll transactions tested did not have documentation available to support the allocationof the expense to the program in accordance with 2 CFR 200.405.- Three of the non-payroll transactions tested did not meet the reasonable and necessary criteria of 2 CFR200.403.- Two of the payroll transactions tested was charged to the federal award based upon allocations determinedbefore services were performed with no process to identify significant changes in the corresponding workactivity in accordance with 2 CFR 200.430(i).- Two of the transactions tested did not have adequate documentation to support the item of cost in accordancewith the criteria at 200.403(g).- One of the transactions tested the cost incurred represented a reimbursement for costs in excess of theallowable amount per the Organization?s policies and procedures and did not meet the criteria of 2 CFR 200.403.Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged costs to the federal awards that were unallowable. Questioned CostsActual questioned costs identified during the audit totaled the amounts below by award:Assistance Pass-Through KnownListing Pass-Through Award QuestionedNumber Funder Number Costs21.027 State of Oregon Department of Administrative Services 8152 $ 1921027 King County Regional Homelessness Authority DA-239 $ 3,808CauseInternal controls were not operating effectively to ensure only allowable costs were charged to the federal awards.Repeat FindingNot applicable.RecommendationWe recommend that the Organization provide additional training to employees to ensure that controls operate effectivelyso that only allowable costs are authorized to be charged to federal awards and that record retention controls arestrengthened to ensure documentation and policies are retained to support the distribution of charges between projects.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Federal Agencies: Department of Justice; Department of the TreasuryProgram Titles: Crime Victim Assistance; Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 16.575; 21.027Award Numbers: 22-31219-018, 22-31310-140, 22-31219-019, F19-31219-553, 8152, DA-239Award Periods: VariousCriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles.Condition/Context for EvaluationDuring our audit we identified that a total of 19 of 142 transactions (79 non-payroll transactions and 63 for payrolltransactions) tested for allowable costs and activities did not meet the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsSubpart E - Cost Principles. Below is a disaggregation of the exceptions identified:- Thirteen of the non-payroll transactions tested did not have documentation available to support the allocationof the expense to the program in accordance with 2 CFR 200.405.- Three of the non-payroll transactions tested did not meet the reasonable and necessary criteria of 2 CFR200.403.- Two of the payroll transactions tested was charged to the federal award based upon allocations determinedbefore services were performed with no process to identify significant changes in the corresponding workactivity in accordance with 2 CFR 200.430(i).- Two of the transactions tested did not have adequate documentation to support the item of cost in accordancewith the criteria at 200.403(g).- One of the transactions tested the cost incurred represented a reimbursement for costs in excess of theallowable amount per the Organization?s policies and procedures and did not meet the criteria of 2 CFR 200.403.Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged costs to the federal awards that were unallowable. Questioned CostsActual questioned costs identified during the audit totaled the amounts below by award:Assistance Pass-Through KnownListing Pass-Through Award QuestionedNumber Funder Number Costs21.027 State of Oregon Department of Administrative Services 8152 $ 1921027 King County Regional Homelessness Authority DA-239 $ 3,808CauseInternal controls were not operating effectively to ensure only allowable costs were charged to the federal awards.Repeat FindingNot applicable.RecommendationWe recommend that the Organization provide additional training to employees to ensure that controls operate effectivelyso that only allowable costs are authorized to be charged to federal awards and that record retention controls arestrengthened to ensure documentation and policies are retained to support the distribution of charges between projects.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Finding 2022-003Material weakness in internal controls over compliance for allowable activities and costs and material non-compliance inthe Coronavirus State and Local Fiscal Recovery Fund program.Federal Agencies: Department of Justice; Department of the TreasuryProgram Titles: Crime Victim Assistance; Coronavirus State and Local Fiscal Recovery FundAssistance Listing Numbers: 16.575; 21.027Award Numbers: 22-31219-018, 22-31310-140, 22-31219-019, F19-31219-553, 8152, DA-239Award Periods: VariousCriteriaCharges to federal awards must meet the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E - Cost Principles.Condition/Context for EvaluationDuring our audit we identified that a total of 19 of 142 transactions (79 non-payroll transactions and 63 for payrolltransactions) tested for allowable costs and activities did not meet the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsSubpart E - Cost Principles. Below is a disaggregation of the exceptions identified:- Thirteen of the non-payroll transactions tested did not have documentation available to support the allocationof the expense to the program in accordance with 2 CFR 200.405.- Three of the non-payroll transactions tested did not meet the reasonable and necessary criteria of 2 CFR200.403.- Two of the payroll transactions tested was charged to the federal award based upon allocations determinedbefore services were performed with no process to identify significant changes in the corresponding workactivity in accordance with 2 CFR 200.430(i).- Two of the transactions tested did not have adequate documentation to support the item of cost in accordancewith the criteria at 200.403(g).- One of the transactions tested the cost incurred represented a reimbursement for costs in excess of theallowable amount per the Organization?s policies and procedures and did not meet the criteria of 2 CFR 200.403.Our sample was not a statistical sample.Effect or Potential EffectThe Organization charged costs to the federal awards that were unallowable. Questioned CostsActual questioned costs identified during the audit totaled the amounts below by award:Assistance Pass-Through KnownListing Pass-Through Award QuestionedNumber Funder Number Costs21.027 State of Oregon Department of Administrative Services 8152 $ 1921027 King County Regional Homelessness Authority DA-239 $ 3,808CauseInternal controls were not operating effectively to ensure only allowable costs were charged to the federal awards.Repeat FindingNot applicable.RecommendationWe recommend that the Organization provide additional training to employees to ensure that controls operate effectivelyso that only allowable costs are authorized to be charged to federal awards and that record retention controls arestrengthened to ensure documentation and policies are retained to support the distribution of charges between projects.Views of Responsible Officials of AuditeeManagement agrees with the finding and has provided the accompanying corrective action plan.
Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Activities Allowed or Unallowed/Allowable Costs/Cost Principles Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – The following exceptions were noted during testing of 138 program disbursements, 93 payroll disbursements, and 100 journal entry transactions: • 20 invoices could not be located related to program disbursements • 6 invoices tested did not agree to the approved allocation of Head Start expenses • 1 timecard could not be located • multiple instances where an approved pay rate covering the appropriate time-period could not be obtained • 12 instances where supporting documentation for journal entries to adjust Head Start expenses could not be obtained. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – $151,608. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Condition: We selected a sample of payroll cost allocations and tested whether the employees’ time were allocated in accordance with Day One’s cost allocations by program. As a result of our test, we noted that one employee’s hours were did not match the allocation guidelines provided by the Organization and hours were improperly charged to the Substance Abuse Prevention and Control program. Criteria: § 200.405 Allocable costs. (a) A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost: (1) Is incurred specifically for the Federal award; (2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and (3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart.Cause: The Organization has not implemented policies and procedures requiring management review the accuracy of the costs allocations to each program prior to being recording in the accounting records. Questioned Costs: $1,282.83 Effect and Context: By improperly allocating payroll costs to the Substance Abuse Prevention and Control-CPS program, the amount of costs reported for this program are overstated at June 30, 2022. Recommendation: We also recommend management review allocation percentages and application of allocations prior to recording the costs in the accounting records. Management’s Response and Corrective Action Plan: See management’s responses documented on page 46-47.
Finding Number: 2022-SA3 Material Weakness – Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Period of Performance Compliance and Control Finding Federal Award: No. 64.024 VA Homeless Providers Grant and Per Diem Program Federal Agency: U.S. Veterans Administration Pass-Through Entity: Not applicable Repeat Finding: Yes – 2021-SA3 Criteria or Specific Requirement: CFR section 200.403, Factors affecting allowability of costs, states costs must: conform to limitations or exclusions, be accorded consistent treatment, a cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost and be adequately documented. 2 CFR section 200.405, Allowable costs, states this standard is met if the cost is incurred specifically for the Federal award. 2 CFR section 200.430(i) Standards for Documentation of Personnel Expenses state charges to Federal awards for salaries must be based on records that accurately reflect the work performed and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, 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, and charges for the salaries and wages of nonexempt employee must be supported by records indicating the total number of hours worked each day. Condition: The Organization did not maintain an effective control environment to ensure costs incurred for expenditures charged to the program were in accordance with contract requirements and applicable cost principles. Records do not provide reasonable assurance that the charges are accurate, allowable, and properly allocated. Records do not appear to 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 or a Federal award and non-federal activity. Charges for non-exempt employees are not supported by records indicating the total number of hours worked each day. Expenditure details included costs that were allocated to the Federal award but may not have been incurred specifically for the Federal award. These costs included unsupported journal entries and uncategorized expenditures. Additionally, due to lack of budgets for the fiscal year, it was not determinable if costs conformed to limitations or exclusions set forth in the Federal award. Costs were not adequately documented, and it is unknown if costs were accorded consistent treatment. Cause: Factors beyond the control of current management, including poor recordkeeping, have caused financial records to be inadequate for audit purposes, as key members of the accounting department left the Organization before appropriately transferring knowledge and records related to the Federal awards. Effect or Potential Effect: Potential for unallowable activities, unallowable costs, and costs outside of the period of performance and additional questioned costs. Questioned Costs: Questioned costs related to payroll expenditures are unknown. Questioned costs related to non-payroll expenditures are unknown. Context: These issues stem from policies and procedures established by former key accounting personnel, predate current management’s oversight, and were therefore outside their direct control. Recommendation: Policies and procedures should be designed and implemented to ensure expenditures are reviewed for allowability before being charged to federal awards. Policies and procedures should be designed and implemented to ensure costs are reviewed for allowability before being charged to federal awards. Management should perform budget to actual analysis on a periodic basis to ensure that costs are not exceeding limitations. View of Responsible Officials: In response to Finding No. 2022-SA3, management agrees with the finding. Corrective actions were implemented in subsequent fiscal years. Unallowable costs are identified and documented in the Accounting Policies and Procedures Manual and communicated to the Finance Department and the Organization’s employees. The CFO regularly communicates these requirements to directors and staff through weekly and monthly meetings to ensure a clear understanding of allowable versus unallowable costs. In addition, quarterly budget-to-actual analyses are prepared and reviewed to monitor expenditure and ensure costs remain within approved budget limitations.
Criteria: Title 2 of the Code of Federal Regulations (2 CFR), Part 200, Subpart E defines and discusses the federal cost principles that apply to federal awards administered by nonprofit organizations. The applicable sections of these cost principes are as follows: • 2 CFR 200.403 Factors affecting allowability of costs • 2 CFR 200.404 Reasonable costs • 2 CFR 200.405 Allocable costs • 2 CFR 200.413 Direct costs • 2 CFR 200.414 Indirect (F&A) costs Condition: The following were noted as related to compliance with allowable costs, cost allocation and federal cost principles: • Internal control on time spent by employees related to administrative functions or other indirect cost activities has not been properly designed or implemented. • All employee time, including employees and professional services contractors are being recorded directly to programs. Time spent on indirect activities is not being properly identified or properly allocated to programs. • A portion of time of the Operations Manager (Chief Executive of the Organization) is spent related to administrative time or other indirect cost activities. However, none of that time has been identified or charged as indirect costs. • The time card for the Operations Manager (Chief Executive of the Organization) is not reviewed or approved by a board member or other senior executive of the Organization. • The accounting services of AIRS is being provided by a third-party outsourced accountant. The costs related to these services were improperly recorded as direct personnel costs to the program rather than properly classified as indirect costs. • Payroll taxes, employee benefits and other allowable employee related expenses were allocated to the program in a manner that does not accurately reflect the relative benefits received. These costs were allocated to the program as a percentage of total payroll costs, however, the percentage used exceeds that actual percentage of these costs as a percentage of total payroll costs. • A reasonable, consistent and uniform cost allocation methodology has not been properly designed or implemented. Costs that benefit both federal programs, non-federal programs and indirect costs are not being allocated properly across and to federal programs, non-federal programs and indirect costs in a reasonable, consistent and uniform manner. • Certain direct costs charged to the program were not based on actual costs incurred and the amounts charged were not adequately supported. • Indirect costs were not properly identified and segregated from direct costs. • Allowable indirect costs were not charged to the federal program. Cause: AIRS accounting staff and senior management do not appear to have a full and complete understanding of Uniform Guidance or of the applicable federal cost principles. Management has not properly applied the applicable federal costs principles in 2 CFR, Part 200, Subpart E to the costs charged to the federal program. Effect: Payroll costs and allowable employee related expenses, certain direct costs, allocable direct costs and indirect costs were not properly charged to the federal program. In order to estimate the questioned costs, the auditor, with the assistance of management, developed a costs allocation methodology that charges costs to the federal program in a reasonable, consistent and uniform manner in compliance with the costs principles contained in 2 CFR, Part 200, Subpart E. The primarily characteristics of this methodology are as follows: • Based upon discussions with management, review of the job description, roles and responsibilities of the Operations Manager and using prior experience and comparison to similar nonprofit organizations; an estimate of the percentage of time spent by the Operations Manager related to administration and other indirect activities was developed. • The time for the outsourced accounting services provider was removed from direct personnel costs and charged to indirect costs. • After the above revisions were made, the auditor assisted management in reallocating payroll costs across all federal and nonfederal programs and to indirect costs in a reasonable, consistent and uniform manner. • Allowable payroll taxes, benefits and other employee related expense charges were estimated using the actual percentage of these expenses as a percentage of total allowable payroll costs. • Non-allocable direct costs were charged to the program at the actual amount of those costs incurred. • Allocable direct costs charges were estimated by allocating those costs to the federal program on the basis of allowable payroll costs charged to program as a percentage of total allowable payroll costs (percentage of payroll methodology). This methodology is in compliance with the requirements of 2 CFR 200.405 and appears to produce a result that reasonably estimates the proportional benefit of these costs to all federal and non-federal programs, and to indirect cost activities. • Indirect costs were estimated and charged to the program using the 10% de minimis indirect cost rate as defined in 2 CFR 200.414. Questioned Costs: Using the methodology described above, the auditor has estimated total federal expenditures allowable to the program of $247,119. However, AIRS has charged federal expenditures of $272,781 to the program. Therefore, the estimated questioned costs related to this program are $25,662. Repeat Finding from Prior Year: No Recommendation: Senior management and accounting personnel should create procedures to ensure that direct program costs are charged at the actual amounts incurred, develop a payroll cost allocation methodology, and an allocable direct cost allocation methodology that ensures that costs are reasonably, consistently and uniformly charged to and across all federal and non-federal programs and to indirect costs relative to the proportional benefit of those costs, and in compliance with the applicable federal cost principles in 2 CFR, Part 200, Subpart E. Management and the board should consider providing senior management, accounting personnel and applicable program personnel additional training and education related to the proper application of and compliance with the federal costs principles as defined in 2 CFR, Part 200, Subpart E. Management and the board may also want to consider engaging a third-party CPA or other accounting professional who has extensive prior skills, knowledge and experience related to Uniform Guidance and federal cost principles. Views of Responsible Officials: Management concurs with this audit finding.
Criteria: Title 2 of the Code of Federal Regulations (2 CFR), Part 200, Subpart E defines and discusses the federal cost principles that apply to federal awards administered by nonprofit organizations. The applicable sections of these cost principes are as follows: • 2 CFR 200.403 Factors affecting allowability of costs • 2 CFR 200.404 Reasonable costs • 2 CFR 200.405 Allocable costs • 2 CFR 200.413 Direct costs • 2 CFR 200.414 Indirect (F&A) costs Condition: The following were noted as related to compliance with allowable costs, cost allocation and federal cost principles: • Internal control on time spent by employees related to administrative functions or other indirect cost activities has not been properly designed or implemented. • All employee time, including employees and professional services contractors are being recorded directly to programs. Time spent on indirect activities is not being properly identified or properly allocated to programs. • A portion of time of the Operations Manager (Chief Executive of the Organization) is spent related to administrative time or other indirect cost activities. However, none of that time has been identified or charged as indirect costs. • The time card for the Operations Manager (Chief Executive of the Organization) is not reviewed or approved by a board member or other senior executive of the Organization. • The accounting services of AIRS is being provided by a third-party outsourced accountant. The costs related to these services were improperly recorded as direct personnel costs to the program rather than properly classified as indirect costs. • Payroll taxes, employee benefits and other allowable employee related expenses were allocated to the program in a manner that does not accurately reflect the relative benefits received. These costs were allocated to the program as a percentage of total payroll costs, however, the percentage used exceeds that actual percentage of these costs as a percentage of total payroll costs. • A reasonable, consistent and uniform cost allocation methodology has not been properly designed or implemented. Costs that benefit both federal programs, non-federal programs and indirect costs are not being allocated properly across and to federal programs, non-federal programs and indirect costs in a reasonable, consistent and uniform manner. • Certain direct costs charged to the program were not based on actual costs incurred and the amounts charged were not adequately supported. • Indirect costs were not properly identified and segregated from direct costs. • Allowable indirect costs were not charged to the federal program. Cause: AIRS accounting staff and senior management do not appear to have a full and complete understanding of Uniform Guidance or of the applicable federal cost principles. Management has not properly applied the applicable federal costs principles in 2 CFR, Part 200, Subpart E to the costs charged to the federal program. Effect: Payroll costs and allowable employee related expenses, certain direct costs, allocable direct costs and indirect costs were not properly charged to the federal program. In order to estimate the questioned costs, the auditor, with the assistance of management, developed a costs allocation methodology that charges costs to the federal program in a reasonable, consistent and uniform manner in compliance with the costs principles contained in 2 CFR, Part 200, Subpart E. The primarily characteristics of this methodology are as follows: • Based upon discussions with management, review of the job description, roles and responsibilities of the Operations Manager and using prior experience and comparison to similar nonprofit organizations; an estimate of the percentage of time spent by the Operations Manager related to administration and other indirect activities was developed. • The time for the outsourced accounting services provider was removed from direct personnel costs and charged to indirect costs. • After the above revisions were made, the auditor assisted management in reallocating payroll costs across all federal and nonfederal programs and to indirect costs in a reasonable, consistent and uniform manner. • Allowable payroll taxes, benefits and other employee related expense charges were estimated using the actual percentage of these expenses as a percentage of total allowable payroll costs. • Non-allocable direct costs were charged to the program at the actual amount of those costs incurred. • Allocable direct costs charges were estimated by allocating those costs to the federal program on the basis of allowable payroll costs charged to program as a percentage of total allowable payroll costs (percentage of payroll methodology). This methodology is in compliance with the requirements of 2 CFR 200.405 and appears to produce a result that reasonably estimates the proportional benefit of these costs to all federal and non-federal programs, and to indirect cost activities. • Indirect costs were estimated and charged to the program using the 10% de minimis indirect cost rate as defined in 2 CFR 200.414. Questioned Costs: Using the methodology described above, the auditor has estimated total federal expenditures allowable to the program of $247,119. However, AIRS has charged federal expenditures of $272,781 to the program. Therefore, the estimated questioned costs related to this program are $25,662. Repeat Finding from Prior Year: No Recommendation: Senior management and accounting personnel should create procedures to ensure that direct program costs are charged at the actual amounts incurred, develop a payroll cost allocation methodology, and an allocable direct cost allocation methodology that ensures that costs are reasonably, consistently and uniformly charged to and across all federal and non-federal programs and to indirect costs relative to the proportional benefit of those costs, and in compliance with the applicable federal cost principles in 2 CFR, Part 200, Subpart E. Management and the board should consider providing senior management, accounting personnel and applicable program personnel additional training and education related to the proper application of and compliance with the federal costs principles as defined in 2 CFR, Part 200, Subpart E. Management and the board may also want to consider engaging a third-party CPA or other accounting professional who has extensive prior skills, knowledge and experience related to Uniform Guidance and federal cost principles. Views of Responsible Officials: Management concurs with this audit finding.