Finding 2024-002 - Significant Deficiency Federal Program: Education Stabilization Fund (ESF) - ALN 84.425 Criteria: In accordance with 2 CFR §200.430, compensation for personal services must be based on records that accurately reflect the work performed and must be consistent with the entity’s established salary schedule. Adequate internal controls must be in place to ensure that payroll disbursements are calculated and paid accurately in accordance with approved compensation policies. Condition: It was noted during single audit testing that certain employees tested were paid less than the amounts specified in the Board’s published salary schedule, thus resulting in underpayment. Cause: The underpayments occurred due to a lack of adequate internal controls to ensure payroll amounts were calculated in accordance with the approved salary schedule. Specifically, there was no documented review or verification process in place to confirm that employee pay amounts aligned with the published salary schedule, which allowed the discrepancies to go undetected. Effect: As a result of this control weakness, the Board’s financial records did not reflect accurate payroll expenses and related liabilities. This error represents a significant potential misstatement and indicates a systemic issue in payroll processing controls. However, since the payroll costs were not charged to the grant, and no unallowable costs were identified, the amounts are not considered questioned costs and no noncompliance was identified. This control deficiency is considered a significant deficiency in internal control over compliance. Recommendation: The Board should strengthen its internal control procedures over payroll processing by implementing a formal, documented review process to ensure all employee compensation is properly calculated in accordance with the published salary schedule prior to payment. Management should also perform periodic reconciliations of payroll amounts to approved salary schedules as part of ongoing monitoring procedures. Views of Responsible Officials: The Board agrees with the finding and acknowledges the payroll errors identified. Upon notification, the Board reviewed the payroll records of the certain employees with identified errors and confirmed the underpayments. Corrective action was taken on the identified employees and the Board issued checks to pay the difference owed. The Board is also implementing additional review procedures to ensure that future payroll is processed in accordance with approved salary schedules.
Program: ALN 84.425V, Department of Education, Education Stabilization Fund, Emergency Assistance to Non-Public Schools, passed through the State of Alaska, grant number CO23.244.01/1004 052132102 2211Criteria: 2 CFR section 200.303(d)(2), states that a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal award. 2 CFR section 200.430(g)(1), states that charges to Federal awards for salaries and wages must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: SAAMS’ policies require a payroll batch report be reviewed prior to issuing payroll. This payroll batch report specifies employee name, program charged, amount charged to each program, hours, and pay rate. During our testing, we identified that the payroll batch report did not always contain amounts charged to each program or pay rates, making the review ineffective. Cause: Turnover in personnel during the fiscal year led to inadequate training and inconsistent performance of the payroll batch report review. Effect: Unallowable payroll costs may be charged to a federal program. Questioned costs: None Context: During our testing of 11 payroll batch reports, 5 did not contain pay rates or amounts charged to each program. Statistical sampling: No Repeat finding: No Recommendation: We recommend the entity develop policies that incorporate standardized reporting and description of the review objective, along with training to staff.
Finding: 2024-004 Time/Salary Allocations (Significant Deficiency) Information on the Federal Programs: ALN #21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria or Specific Requirement (including Statutory, Regulatory, or Other Citation): CFR §200.430 Compensation—personal services. States; (g) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Criteria or Specific Requirement (including Statutory, Regulatory, or Other Citation) (continued): These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our audit of DOL’s compensation practices, we noted that salaries and benefits charged to Federal programs were allocated using predetermined estimates rather than contemporaneous records reflecting actual time spent. These allocations were not supported by detailed documentation, such as timekeeping records or personnel activity reports, and the only support available was in the form of internal memos recorded in the general ledger. Cause: DOL has not implemented a system for documenting time and effort in a manner that complies with Federal requirements. The current process relies on estimates rather than actual, verifiable work performed. Effect or Potential Effect: Without accurate and documented time and effort reporting, there is a risk that Federal awards are either overcharged or undercharged for salaries and benefits. This creates the potential for noncompliance with Federal cost principles, and could lead to disallowed costs in the event of a monitoring or program audit. For ALN #21.027, we identified $80,985 in questioned costs, representing the total amount of unsupported salary and benefit charges to this program. Such deficiencies could also impair the Organization's eligibility for future Federal funding. Questioned Costs: $80,985 (all salaries and benefits changed to ALN #21.027) Context: We tested a statistically valid sample of employee salaries charged to Federal awards. The deficiencies noted were consistent across the sample population, indicating a systemic issue rather than isolated exceptions. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend that DOL strengthen its payroll allocation procedures to ensure compliance with 2 CFR §200.430. Specifically, we advise the following steps: 1. Implement Time and Effort Reporting: All employees whose salaries are charged in whole or in part to Federal awards should complete project-specific timesheets that record actual time spent on each cost objective or funding source. 2. Certifications and Approvals: Timesheets should be signed by the employee and reviewed and certified by their direct supervisor to confirm accuracy. 3. Allocate Based on Actual Time: Salaries and benefits should be allocated to funding sources based on the proportion of actual time worked, as indicated in approved timesheets, rather than based on estimates. 4. Incorporate into Internal Controls: These procedures should be incorporated into DOL’s internal control system and formally documented in its accounting policies and procedures manual. 5. Training and Oversight: Staff responsible for managing payroll allocations and Federal reporting should receive training on Federal time and effort requirements. Periodic internal reviews should be conducted to ensure adherence. By implementing these practices, DOL will significantly reduce the risk of questioned costs, improve compliance with Federal grant requirements, and strengthen the reliability of its financial reporting.
2024-039 - Inadequate Oversight of Davis-Bacon Compliance Federal Program 23.002 - Appalachian Area Development 14.228 - Community Development Block Grants/State's Program Award Numbers ARC-20698 ARC-20699 CDBG Subgrant: 1137-21-111-PF-01 Federal Agency U.S. Department of Housing and Urban Development (HUD) Appalachian Regional Commission (ARC) Compliance Requirement Special Tests and Provisions - Davis-Bacon Act (24 CFR §570.603) Type of Finding Internal Control over Compliance - Significant Deficiency Compliance - Noncompliance with Special Tests and Provisions Questioned Costs None Criteria Per 2 CFR §200.430 and Davis-Bacon Act requirements, recipients must ensure that contractors and subcontractors pay laborers and mechanics prevailing wage rates and fringe benefits as determined by the U.S. Department of Labor. Effective oversight includes documented review procedures, monitoring activities, and resolution of discrepancies. Condition For ARC MS-20699 and CDBG 1137-21-111-PF-01, the auditor tested 10 of 33 certified payrolls. Two payrolls (20%) omitted employee classifications, which were not identified during the grant administrator's review. A letter dated September 2, 2025, was later obtained certifying the employees were laborers and paid the appropriate wage and fringe rates. No documentation of prior corrective action was available. For ARC MS-20698, the auditor tested all 17 payrolls submitted. Four certified payrolls from the primary contractor were not submitted and could not be tested. Of the submitted payrolls: Two lacked employer signatures on WH-347 forms Three subcontractor payrolls listed employees as "plumber" or "plumber assistant," classifications not included in the applicable wage determination No SF-1444 conformance request was submitted to the Department of Labor One subcontractor payroll lacked a signed certification page In both grants, the grant administrator relied solely on visual checkmarks to indicate payroll review. No formal checklist, documentation of oversight, or corrective action procedures were maintained. Employee interviews were limited to a single date for ARC MS-20699 and to one employee for ARC MS-20698, with no wage rate recorded. Cause The City did not establish formal internal control procedures for Davis-Bacon oversight, including documented review protocols, periodic employee interviews, and a process for resolving discrepancies or following up on missing or incomplete payrolls. Effect Weaknesses in oversight may result in undetected noncompliance with Davis-Bacon requirements, including misclassification or underpayment of wages. The absence of classification, missing payrolls, and unapproved job categories prevent full verification of wage rate compliance. These deficiencies represent both a significant deficiency in internal control and procedural noncompliance with Davis-Bacon provisions. Recommendation The City should implement formal internal control procedures for Davis-Bacon compliance, including: A documented payroll review checklist Periodic employee interviews throughout the construction period A process for identifying and resolving discrepancies Procedures for submitting SF-1444 conformance requests when needed Follow-up protocols for missing or unsigned certified payroll Views of Responsible Officials Management concurs with the finding. The City acknowledges that oversight of Davis-Bacon compliance was informal and lacked documentation. To strengthen internal controls, the City will implement a formal payroll review checklist and conduct periodic employee interviews throughout future construction projects. Staff will receive training on Davis-Bacon requirements, and a process will be established for identifying and resolving discrepancies in certified payrolls, including submission of conformance requests when necessary.
2024-038 - Inadequate Documentation of HIDTA Personnel Costs Federal Program 95-001 -- High Intensity Drug Trafficking Areas (HIDTA) Award Number G23-GC0003A Federal Agency Office of National Drug Control Policy Compliance Requirement Allowable Costs/Cost Principles - 2 CFR §200.430 Type of Finding Internal Control over Compliance - Significant Deficiency Compliance - Noncompliance Questioned Costs $14,418 Criteria Per 2 CFR §200.430, personnel costs charged to federal awards must be supported by records that accurately reflect the work performed and be subject to internal control review. Condition Although the HIDTA program was not selected for major program testing under the Single Audit, we identified this issue during the financial statement audit. The Police Department submitted payroll costs totaling $14,418 for HIDTA reimbursement across three quarters. Documentation included overtime forms and manual time cards that lacked sufficient detail, such as start/stop times, activity descriptions, and supervisor approval. These records do not meet the standards for supporting federal personnel costs under 2 CFR §200.430. Cause The City's internal controls over timekeeping and payroll documentation are not sufficient to ensure compliance with federal requirements. Effect Personnel costs totaling $14,418 are considered questioned costs due to inadequate documentation. These costs may be ineligible for reimbursement under the HIDTA program. Recommendation We recommend the City strengthen internal controls over payroll documentation and ensure that all personnel costs charged to federal awards are supported by detailed, approved records that clearly reflect HIDTA-related activities. Views of Responsible Officials Management concurs with the finding. The City acknowledges that payroll documentation submitted for HIDTA reimbursement lacked sufficient detail and formal approval. To address this, the City will implement a standardized timekeeping system that includes start/stop times, activity descriptions, and supervisor sign-off. Staff will receive training on federal documentation standards, and internal controls will be updated to ensure compliance with 2 CFR §200.430.
Criteria Per 2 CFR 200.403, for a cost to be allowable under a Federal award, it must be necessary and reasonable for the performance of the award. Furthermore, 2 CFR 200.430(g) requires that charges for salaries and wages be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition Management's calculation for allowable temporary labor costs charged to the Disaster Grants – Public Assistance program (ALN 97.036) included an error in the data file used for the calculations. Total temporary labor costs charged to this award were $12,770,434. This error led to using incorrect wages for temporary workers who worked standard hours and overtime hours on the same day. This error occurred only for workers from one temporary labor vendor based on the formatting of the invoice information from that vendor. As a result, the temporary labor costs claimed for reimbursement for these workers were overstated by $353,420. Cause and Effect Brown Health’s control for reviewing the allowability of temporary labor invoices was not designed to include a detailed reconciliation of vendor provided data. Specifically, the review process did not verify that the wages for workers that had standard and overtime hours were consistent with the underlying invoice, which allowed the error to be undetected. The control deficiency caused Brown Health to claim temporary labor costs in excess of the actual amounts incurred. As a result, the claim was not in compliance with the Federal cost principles, which require costs to be accurate and based on records that correctly reflect the work performed. The overstated portion of the labor costs claimed for reimbursement are considered questioned costs. Questioned costs $353,420 Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding This is not a repeat finding. Recommendation We recommend that Brown Health management strengthen its internal controls over the review of temporary labor costs to ensure compliance with Federal regulations. Specifically, Brown Health should revise its invoice review procedures to include a detailed reconciliation of hours and wage calculations for temporary labor. Additionally, Brown Health should work with the granting agency to resolve the resulting questioned costs. View of Responsible Officials Brown Health management concurs with this finding. We have already initiated a detailed review to identify and quantify the total amount of the labor cost overstatement. We will report our results to the granting agency and work with them to resolve the questioned costs by May 31, 2026. To prevent recurrence, management will revise our review control of project applications to reconcile the calculation file to invoice support to verify accuracy.
PROGRAM DESCRIPTION Reference Number: 2024-004 Proper review of payroll charges to grant funds ALN 84.425U & 84.425W COVID-19 Education Stabilization Fund Pass through identifying number: 21528001245902 Award Year: 2023-2024 Federal Agency: U.S. Department of Education Passed through State Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a) and 2 CFR 200.430(g) which requires that compensation charged to federal awards must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, of which documentation must be incorporated into the official records of the entity. Condition Found: During our review of payroll charges that were funded through ESSER funds, it was noted that the District did not have adequate controls in place to monitor the payroll transactions charged to the program. Cause: Although the District implemented Skyward in the prior year, the District did not integrate the appropriate approvals into the system in a timely manner. In addition, turnover in the District Chief Financial Officer position caused difficulties in the District obtaining the proper approvals for journal entries. Effect: The District could fail to appropriately support expenditures charged to the program. Questioned Cost: $0 Recommendation: We recommend the District to implement appropriate approvals in the Skyward accounting system to provide for better oversight of transactions. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 114.
PROGRAM DESCRIPTION Reference Number: 2024-004 Proper review of payroll charges to grant funds ALN 84.425U & 84.425W COVID-19 Education Stabilization Fund Pass through identifying number: 21528001245902 Award Year: 2023-2024 Federal Agency: U.S. Department of Education Passed through State Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a) and 2 CFR 200.430(g) which requires that compensation charged to federal awards must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, of which documentation must be incorporated into the official records of the entity. Condition Found: During our review of payroll charges that were funded through ESSER funds, it was noted that the District did not have adequate controls in place to monitor the payroll transactions charged to the program. Cause: Although the District implemented Skyward in the prior year, the District did not integrate the appropriate approvals into the system in a timely manner. In addition, turnover in the District Chief Financial Officer position caused difficulties in the District obtaining the proper approvals for journal entries. Effect: The District could fail to appropriately support expenditures charged to the program. Questioned Cost: $0 Recommendation: We recommend the District to implement appropriate approvals in the Skyward accounting system to provide for better oversight of transactions. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 114.
PROGRAM DESCRIPTION Reference Number: 2024-004 Proper review of payroll charges to grant funds ALN 84.425U & 84.425W COVID-19 Education Stabilization Fund Pass through identifying number: 21528001245902 Award Year: 2023-2024 Federal Agency: U.S. Department of Education Passed through State Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a) and 2 CFR 200.430(g) which requires that compensation charged to federal awards must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, of which documentation must be incorporated into the official records of the entity. Condition Found: During our review of payroll charges that were funded through ESSER funds, it was noted that the District did not have adequate controls in place to monitor the payroll transactions charged to the program. Cause: Although the District implemented Skyward in the prior year, the District did not integrate the appropriate approvals into the system in a timely manner. In addition, turnover in the District Chief Financial Officer position caused difficulties in the District obtaining the proper approvals for journal entries. Effect: The District could fail to appropriately support expenditures charged to the program. Questioned Cost: $0 Recommendation: We recommend the District to implement appropriate approvals in the Skyward accounting system to provide for better oversight of transactions. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 114.
PROGRAM DESCRIPTION Reference Number: 2024-004 Proper review of payroll charges to grant funds ALN 84.425U & 84.425W COVID-19 Education Stabilization Fund Pass through identifying number: 21528001245902 Award Year: 2023-2024 Federal Agency: U.S. Department of Education Passed through State Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a) and 2 CFR 200.430(g) which requires that compensation charged to federal awards must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, of which documentation must be incorporated into the official records of the entity. Condition Found: During our review of payroll charges that were funded through ESSER funds, it was noted that the District did not have adequate controls in place to monitor the payroll transactions charged to the program. Cause: Although the District implemented Skyward in the prior year, the District did not integrate the appropriate approvals into the system in a timely manner. In addition, turnover in the District Chief Financial Officer position caused difficulties in the District obtaining the proper approvals for journal entries. Effect: The District could fail to appropriately support expenditures charged to the program. Questioned Cost: $0 Recommendation: We recommend the District to implement appropriate approvals in the Skyward accounting system to provide for better oversight of transactions. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 114.
Allowable Costs/Activities Allowed – Personal Services Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases ALN: 93.323 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NU50CK000501-01-08, 6 NU50CK000501-02-17 August 1, 2019 – July 31, 2024, August 1, 2019 – July 31, 2027 Statistically Valid Sample: No, and not intended to be a statistically valid sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), the Texas Department of State Health Services (DSHS) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.430 Standards for Documentation of Personnel Expenses, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by an internal control system that ensures the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) comply with the established accounting policies and practices of the non-Federal entity; (vi) support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: DSHS requires its employees to complete monthly time and leave reporting, regardless of whether the employee works solely on a single federal award or cost objective, or on multiple activities or cost objectives. Each employee has a default task profile based on their position in the agency that determines how their payroll and payroll-related dollars are allocated. Employees are instructed and given training on how to report any deviations from their profile as well as report any vacation time, sick time, leave of absence, etc. Employees are required to certify their time by the 10th of the month for the previous months’ time. Like all DSHS employees, supervisors are required to certify their time monthly. However, their time certification includes an additional affirmation which states the supervisor has performed the following: Reviewed the default task profile/labor account code for each of their direct reports. Reviewed the timesheets for all direct reports as compared to the default task profiles/labor account codes for accuracy of time worked and adjusted if necessary. For direct reports who have reported deviations, reviewed and verified the deviations reported and approved the respective timesheet. This documented affirmation provides sufficient documentation to indicate that the supervisors have reviewed after the fact interim payroll and payroll-related charges made to federal awards based on budget estimates. Audit procedures included a selection of 40 payroll-related expenditures incurred during the fiscal year totaling $191,809. For five of the 40 samples selected, the employee supervisor did not certify their monthly timesheet, and thus did not acknowledge neither the review of the employees’ default task profile/account labor code or their timesheets. Questioned costs: None. Context: See “Condition.” Cause: All five of the exceptions noted were directly reporting to the same supervisor. The monthly timesheets selected were during the months of July and August 2024. The supervisor was recently hired in April 2024 and was unaware of the requirement to certify monthly. Effect: Without the supervisor timesheet certification, there is a lack of sufficient documentation to indicate that they have reviewed after-the-fact interim payroll and payroll-related charges made to the federal awards based on budget estimates. Repeat Finding: No Recommendation: DSHS should enhance new hire training policies and procedures to ensure all new hire trainings clearly address labor account codes, monthly time reporting, and task profiles. Views of responsible officials: DSHS has robust timekeeping controls but recognizes this opportunity to enhance training with reinforcement for new supervisors.
Allowable Costs/Activities Allowed – Personal Services Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases ALN: 93.323 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NU50CK000501-01-08, 6 NU50CK000501-02-17 August 1, 2019 – July 31, 2024, August 1, 2019 – July 31, 2027 Statistically Valid Sample: No, and not intended to be a statistically valid sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), the Texas Department of State Health Services (DSHS) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.430 Standards for Documentation of Personnel Expenses, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by an internal control system that ensures the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) comply with the established accounting policies and practices of the non-Federal entity; (vi) support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: DSHS requires its employees to complete monthly time and leave reporting, regardless of whether the employee works solely on a single federal award or cost objective, or on multiple activities or cost objectives. Each employee has a default task profile based on their position in the agency that determines how their payroll and payroll-related dollars are allocated. Employees are instructed and given training on how to report any deviations from their profile as well as report any vacation time, sick time, leave of absence, etc. Employees are required to certify their time by the 10th of the month for the previous months’ time. Like all DSHS employees, supervisors are required to certify their time monthly. However, their time certification includes an additional affirmation which states the supervisor has performed the following: Reviewed the default task profile/labor account code for each of their direct reports. Reviewed the timesheets for all direct reports as compared to the default task profiles/labor account codes for accuracy of time worked and adjusted if necessary. For direct reports who have reported deviations, reviewed and verified the deviations reported and approved the respective timesheet. This documented affirmation provides sufficient documentation to indicate that the supervisors have reviewed after the fact interim payroll and payroll-related charges made to federal awards based on budget estimates. Audit procedures included a selection of 40 payroll-related expenditures incurred during the fiscal year totaling $191,809. For five of the 40 samples selected, the employee supervisor did not certify their monthly timesheet, and thus did not acknowledge neither the review of the employees’ default task profile/account labor code or their timesheets. Questioned costs: None. Context: See “Condition.” Cause: All five of the exceptions noted were directly reporting to the same supervisor. The monthly timesheets selected were during the months of July and August 2024. The supervisor was recently hired in April 2024 and was unaware of the requirement to certify monthly. Effect: Without the supervisor timesheet certification, there is a lack of sufficient documentation to indicate that they have reviewed after-the-fact interim payroll and payroll-related charges made to the federal awards based on budget estimates. Repeat Finding: No Recommendation: DSHS should enhance new hire training policies and procedures to ensure all new hire trainings clearly address labor account codes, monthly time reporting, and task profiles. Views of responsible officials: DSHS has robust timekeeping controls but recognizes this opportunity to enhance training with reinforcement for new supervisors.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles – Personal Services Federal Agency: U.S. Department of Labor Federal Program Title: Employment Service Cluster ALN: 17.207, 17.801 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: DV373362255548–01, 23555DV000036–01, 24555DV000076–01 October 1, 2021 – December 31, 2023, October 1, 2022 – December 31, 2024, October 1, 2023 – December 31, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Nonompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), Texas Veterans Commission (TVC) must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Per 2 CFR 200.430 Standards for Documentation of Personnel Expenses, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: Audit procedures included a sample of 40 expenditures for incurred for personnel services during the fiscal year to test whether the expenditures for salaries and wages were allowable and based on the records that accurately reflect the work performed. We noted that TVC prepares monthly budget reports that are reviewed by the program’s budget analyst and the respective program director or manager. Expenditures related to personnel services are recorded based on the budgeted amount for each individual. No periodic after-the-fact review is performed to verify that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Questioned costs: None Context: See “Condition.” Cause: The employees working on the federal grant program are budgeted to work on the grant 100% of their time. Management deemed this sufficient to substantiate the final amounts charged to the grant. Effect: Lack of a periodic after-the-fact review to verify that the final amounts charged to the Federal award are accurate, allowable, and properly allocated may result in noncompliance with grant terms and conditions and questioned costs. Repeat Finding: No Recommendation: We recommend that management establish procedures and internal controls to perform an after-the-fact review of personnel services to verify that the final amounts charged to the Federal award are accurate, allowable, and properly allocated. This can be accomplished by a supervisor’s review and approval of the employee’s timesheet each pay period or an annual review where necessary adjustments are made. Views of responsible officials: TVC agrees to the recommendation of documenting review and approvals. To note, the monthly Veteran Employment Services (VES) Forecasts and Payroll reports had been reviewed with VES’s Director and/or Operations Manager as well as VES’s Annual State Plan before submission to the U.S. Department of Labor. VES’s Director or Operations Manager’s signature of approval was never documented for confirmation of review.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles – Personal Services Federal Agency: U.S. Department of Labor Federal Program Title: Employment Service Cluster ALN: 17.207, 17.801 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: DV373362255548–01, 23555DV000036–01, 24555DV000076–01 October 1, 2021 – December 31, 2023, October 1, 2022 – December 31, 2024, October 1, 2023 – December 31, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Nonompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), Texas Veterans Commission (TVC) must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Per 2 CFR 200.430 Standards for Documentation of Personnel Expenses, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: Audit procedures included a sample of 40 expenditures for incurred for personnel services during the fiscal year to test whether the expenditures for salaries and wages were allowable and based on the records that accurately reflect the work performed. We noted that TVC prepares monthly budget reports that are reviewed by the program’s budget analyst and the respective program director or manager. Expenditures related to personnel services are recorded based on the budgeted amount for each individual. No periodic after-the-fact review is performed to verify that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Questioned costs: None Context: See “Condition.” Cause: The employees working on the federal grant program are budgeted to work on the grant 100% of their time. Management deemed this sufficient to substantiate the final amounts charged to the grant. Effect: Lack of a periodic after-the-fact review to verify that the final amounts charged to the Federal award are accurate, allowable, and properly allocated may result in noncompliance with grant terms and conditions and questioned costs. Repeat Finding: No Recommendation: We recommend that management establish procedures and internal controls to perform an after-the-fact review of personnel services to verify that the final amounts charged to the Federal award are accurate, allowable, and properly allocated. This can be accomplished by a supervisor’s review and approval of the employee’s timesheet each pay period or an annual review where necessary adjustments are made. Views of responsible officials: TVC agrees to the recommendation of documenting review and approvals. To note, the monthly Veteran Employment Services (VES) Forecasts and Payroll reports had been reviewed with VES’s Director and/or Operations Manager as well as VES’s Annual State Plan before submission to the U.S. Department of Labor. VES’s Director or Operations Manager’s signature of approval was never documented for confirmation of review.
Section 2 - Federal and State Award Findings and Questioned Costs Significant Deficiency 2024-001 Payroll costs were allocated to incorrect programs Prevention and Treatment of Substance Abuse, CFDA #93.959, Pass-Through Grant #HHS000539700192 Criteria: In accordance with Uniform Guidance (2 CFR § 200.430g), payroll costs must be charged accurately to federal awards and should be supported by records that appropriately reflect the work performed. Condition: Payroll costs reported for the associated programs under pass-through grant #HHS000539700192 totaling approximately $30,242 were erroneously charged to the incorrect program. Cause: The issue was caused by coding errors in the accounting system during payroll processing. The responsible personnel mistakenly allocated the employees' hours to incorrect program codes for certain employees and pay periods without adequate review and reconciliation to the source timesheets. Effect: Payroll costs for the individual programs under CFDA #93.959, Pass-Through Grant #HHS000539700192 were overstated in total by approximately $30,242. Questioned Costs: Approximately $30,242 Context: The finding was isolated to payroll costs and for only certain employees and pay periods, and no findings were identified related to other non-personnel direct or indirect costs or other compliance requirements. Repeat Finding: No Recommendation: We recommend that the Organization strengthen internal controls over payroll cost allocations, including adding an additional layer of review over payroll and ensuring the payroll data in the accounting system is properly reconciled to the employees' timesheets each pay period. Additionally, as possible, we recommend configuring validation controls in the accounting system to help prevent employees from being charged to incorrect program codes. Views of Responsible Officials and Planned Corrections Actions: Management agrees with the audit finding and a response is included in the corrective action plan.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: Under 2 CFR 200.430, payroll expenses must be based on records that accurately reflect the work performed and supported by a system of internal control that provides reasonable assurance that charges are accurate, allowable, and properly allocated. Condition: During the testing performed, it was noted that the Organization transferred payroll costs between programs, however, no time and effort certification or equivalent documentation was updated to reflect the changes. Additionally, the transfer of payroll costs between grants was not properly reflected within the accounting system records by grant. These transfers between grants were completed after the end of the fiscal year. Cause: During the year the Organization had new grants, but the payroll system was not updated to reflect the changes. Effect: Allocation of payroll costs to the federal award program may be inaccurate or not properly documented. Questioned costs: n/a Context: The Organization did not maintain supporting documentation for payroll costs that were reallocated to a new grant. These costs were reallocated from the Health Center Program and from the Healthy Start Initiative funding to the new award. Repeat Finding: No Recommendation: The Organization should review and update the policies and procedures regarding payroll costs. Additionally, the Organization should provide training to staff on grant tracking and documentation. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future changes in payroll costs are updated timely within the system and documentation maintained.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: Under 2 CFR 200.430, payroll expenses must be based on records that accurately reflect the work performed and supported by a system of internal control that provides reasonable assurance that charges are accurate, allowable, and properly allocated. Condition: During the testing performed, it was noted that the Organization transferred payroll costs between programs, however, no time and effort certification or equivalent documentation was updated to reflect the changes. Additionally, the transfer of payroll costs between grants was not properly reflected within the accounting system records by grant. These transfers between grants were completed after the end of the fiscal year. Cause: During the year the Organization had new grants, but the payroll system was not updated to reflect the changes. Effect: Allocation of payroll costs to the federal award program may be inaccurate or not properly documented. Questioned costs: n/a Context: The Organization did not maintain supporting documentation for payroll costs that were reallocated to a new grant. These costs were reallocated from the Health Center Program and from the Healthy Start Initiative funding to the new award. Repeat Finding: No Recommendation: The Organization should review and update the policies and procedures regarding payroll costs. Additionally, the Organization should provide training to staff on grant tracking and documentation. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future changes in payroll costs are updated timely within the system and documentation maintained.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: Under 2 CFR 200.430, payroll expenses must be based on records that accurately reflect the work performed and supported by a system of internal control that provides reasonable assurance that charges are accurate, allowable, and properly allocated. Condition: During the testing performed, it was noted that the Organization transferred payroll costs between programs, however, no time and effort certification or equivalent documentation was updated to reflect the changes. Additionally, the transfer of payroll costs between grants was not properly reflected within the accounting system records by grant. These transfers between grants were completed after the end of the fiscal year. Cause: During the year the Organization had new grants, but the payroll system was not updated to reflect the changes. Effect: Allocation of payroll costs to the federal award program may be inaccurate or not properly documented. Questioned costs: n/a Context: The Organization did not maintain supporting documentation for payroll costs that were reallocated to a new grant. These costs were reallocated from the Health Center Program and from the Healthy Start Initiative funding to the new award. Repeat Finding: No Recommendation: The Organization should review and update the policies and procedures regarding payroll costs. Additionally, the Organization should provide training to staff on grant tracking and documentation. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future changes in payroll costs are updated timely within the system and documentation maintained.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: Under 2 CFR 200.430, payroll expenses must be based on records that accurately reflect the work performed and supported by a system of internal control that provides reasonable assurance that charges are accurate, allowable, and properly allocated. Condition: During the testing performed, it was noted that the Organization transferred payroll costs between programs, however, no time and effort certification or equivalent documentation was updated to reflect the changes. Additionally, the transfer of payroll costs between grants was not properly reflected within the accounting system records by grant. These transfers between grants were completed after the end of the fiscal year. Cause: During the year the Organization had new grants, but the payroll system was not updated to reflect the changes. Effect: Allocation of payroll costs to the federal award program may be inaccurate or not properly documented. Questioned costs: n/a Context: The Organization did not maintain supporting documentation for payroll costs that were reallocated to a new grant. These costs were reallocated from the Health Center Program and from the Healthy Start Initiative funding to the new award. Repeat Finding: No Recommendation: The Organization should review and update the policies and procedures regarding payroll costs. Additionally, the Organization should provide training to staff on grant tracking and documentation. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future changes in payroll costs are updated timely within the system and documentation maintained.
Finding Number 2024-001: Represents a significant deficiency in internal control over compliance with Western Maine Community Action, Inc.’s major federal programs. Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control Over Compliance Description: Payroll Expenditures – Approval of Time Sheets Major Programs: AL#10.557 - WIC Special Supplemental Nutrition Program for Women, Infants and Children – Award numbers: CD3-22-4658B and CD3-24-4658A; AL#81.042 – Weatherization – 80224, 80225, 81323, and 84023; AL#93.569 – Community Services Block Grant – Award numbers: CFS-23-7009 and CFS-24-7009 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of a sample of 80 payroll transactions there were 3 where the timesheet was not properly approved by the supervisor prior to payroll being processed. Criteria: 2 CFR 200.430(i) states that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. Cause: The Organization does not have the proper review process in place to ensure that the timesheets are reviewed by supervisors prior to payroll being processed. Effect: Without proper review and approval of the hours allocated to the grants on the employee timesheets, it is possible that grants could be over or undercharged. Recommendation: We recommend the Organization implement systems and procedures to ensure timesheets are approved by supervisors prior to payroll being processed, to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the findings and has committed to a corrective action plan.
Finding Number 2024-001: Represents a significant deficiency in internal control over compliance with Western Maine Community Action, Inc.’s major federal programs. Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control Over Compliance Description: Payroll Expenditures – Approval of Time Sheets Major Programs: AL#10.557 - WIC Special Supplemental Nutrition Program for Women, Infants and Children – Award numbers: CD3-22-4658B and CD3-24-4658A; AL#81.042 – Weatherization – 80224, 80225, 81323, and 84023; AL#93.569 – Community Services Block Grant – Award numbers: CFS-23-7009 and CFS-24-7009 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of a sample of 80 payroll transactions there were 3 where the timesheet was not properly approved by the supervisor prior to payroll being processed. Criteria: 2 CFR 200.430(i) states that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. Cause: The Organization does not have the proper review process in place to ensure that the timesheets are reviewed by supervisors prior to payroll being processed. Effect: Without proper review and approval of the hours allocated to the grants on the employee timesheets, it is possible that grants could be over or undercharged. Recommendation: We recommend the Organization implement systems and procedures to ensure timesheets are approved by supervisors prior to payroll being processed, to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the findings and has committed to a corrective action plan.
Finding Number 2024-001: Represents a significant deficiency in internal control over compliance with Western Maine Community Action, Inc.’s major federal programs. Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control Over Compliance Description: Payroll Expenditures – Approval of Time Sheets Major Programs: AL#10.557 - WIC Special Supplemental Nutrition Program for Women, Infants and Children – Award numbers: CD3-22-4658B and CD3-24-4658A; AL#81.042 – Weatherization – 80224, 80225, 81323, and 84023; AL#93.569 – Community Services Block Grant – Award numbers: CFS-23-7009 and CFS-24-7009 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of a sample of 80 payroll transactions there were 3 where the timesheet was not properly approved by the supervisor prior to payroll being processed. Criteria: 2 CFR 200.430(i) states that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. Cause: The Organization does not have the proper review process in place to ensure that the timesheets are reviewed by supervisors prior to payroll being processed. Effect: Without proper review and approval of the hours allocated to the grants on the employee timesheets, it is possible that grants could be over or undercharged. Recommendation: We recommend the Organization implement systems and procedures to ensure timesheets are approved by supervisors prior to payroll being processed, to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the findings and has committed to a corrective action plan.
Finding Number 2024-001: Represents a significant deficiency in internal control over compliance with Western Maine Community Action, Inc.’s major federal programs. Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control Over Compliance Description: Payroll Expenditures – Approval of Time Sheets Major Programs: AL#10.557 - WIC Special Supplemental Nutrition Program for Women, Infants and Children – Award numbers: CD3-22-4658B and CD3-24-4658A; AL#81.042 – Weatherization – 80224, 80225, 81323, and 84023; AL#93.569 – Community Services Block Grant – Award numbers: CFS-23-7009 and CFS-24-7009 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of a sample of 80 payroll transactions there were 3 where the timesheet was not properly approved by the supervisor prior to payroll being processed. Criteria: 2 CFR 200.430(i) states that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. Cause: The Organization does not have the proper review process in place to ensure that the timesheets are reviewed by supervisors prior to payroll being processed. Effect: Without proper review and approval of the hours allocated to the grants on the employee timesheets, it is possible that grants could be over or undercharged. Recommendation: We recommend the Organization implement systems and procedures to ensure timesheets are approved by supervisors prior to payroll being processed, to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the findings and has committed to a corrective action plan.
Finding Number 2024-001: Represents a significant deficiency in internal control over compliance with Western Maine Community Action, Inc.’s major federal programs. Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control Over Compliance Description: Payroll Expenditures – Approval of Time Sheets Major Programs: AL#10.557 - WIC Special Supplemental Nutrition Program for Women, Infants and Children – Award numbers: CD3-22-4658B and CD3-24-4658A; AL#81.042 – Weatherization – 80224, 80225, 81323, and 84023; AL#93.569 – Community Services Block Grant – Award numbers: CFS-23-7009 and CFS-24-7009 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of a sample of 80 payroll transactions there were 3 where the timesheet was not properly approved by the supervisor prior to payroll being processed. Criteria: 2 CFR 200.430(i) states that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. Cause: The Organization does not have the proper review process in place to ensure that the timesheets are reviewed by supervisors prior to payroll being processed. Effect: Without proper review and approval of the hours allocated to the grants on the employee timesheets, it is possible that grants could be over or undercharged. Recommendation: We recommend the Organization implement systems and procedures to ensure timesheets are approved by supervisors prior to payroll being processed, to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the findings and has committed to a corrective action plan.
2024-007 Lack of Semi-Annual Certifications for Special Education Personnel Type of Finding: Material Weakness in Internal Control Over Compliance New or Repeat Finding: New Federal Program: Special Education Cluster (ALNs 84.027, 84.173) Federal Agency: U.S. Department of Education Pass-through Entity(ies): Texas Education Agency (246600010849086600, 246610010849086610, 66002406, 225350020849025000, 225360020849025360), Region 10 Education Service Center (236600497110001) Compliance Requirement: B - Allowable Costs / Costs Principles Criteria: Under 2 CFR 200.430(g), when employees work solely on a single federal award or cost objective, charges for their salaries must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. One allowable method is through completion of semi-annual certifications signed by the employee or a supervisory official with firsthand knowledge. These certifications provide assurance that salary costs charged to the federal program reflects the total activity for which the employee is compensated by the District, not exceeding 100% of compensated activities. Condition: The district did not maintain required semi-annual certifications for employees who worked solely on the Special Education Cluster (IDEA) programs. These certifications, which confirm that the employee worked 100% on the program for the period covered, were missing for all employees. Cause: The district did not have adequate procedures in place to ensure the forms were prepared, signed, and retained in accordance with federal requirements. Staff turnover and limited awareness of the documentation rules contributed to the oversight. Effect or Potential Effect: Without semi-annual certifications, the district lacks required documentation to fully support salary costs charged to the Special Education Cluster. This raises the risk that unallowable or unsupported personnel costs were charged to the program, even if employees were appropriately assigned. Questioned Costs: No questioned costs were identified, as auditors were able to verify through alternative procedures that employees worked solely on the program. The personnel records of the employees sampled contained approval of the employee to be hired into the appropriate job duties to be funded by special education cluster grant funds. Context: The district was unable to provide required semi-annual certifications for 14 out of 14 employees selected in our sample for testing. Recommendation: We recommend that the district develop and implement written procedures to ensure that semiannual certifications are prepared, signed, and retained for all employees working solely on federal programs. The district should provide training to finance and program staff to ensure continued compliance with federal documentation requirements. Views of Responsible Officials: District officials agree with the finding. The District has implemented new procedures in fiscal year 2025 to ensure semi-annual certifications are completed appropriately.
2024-007 Lack of Semi-Annual Certifications for Special Education Personnel Type of Finding: Material Weakness in Internal Control Over Compliance New or Repeat Finding: New Federal Program: Special Education Cluster (ALNs 84.027, 84.173) Federal Agency: U.S. Department of Education Pass-through Entity(ies): Texas Education Agency (246600010849086600, 246610010849086610, 66002406, 225350020849025000, 225360020849025360), Region 10 Education Service Center (236600497110001) Compliance Requirement: B - Allowable Costs / Costs Principles Criteria: Under 2 CFR 200.430(g), when employees work solely on a single federal award or cost objective, charges for their salaries must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. One allowable method is through completion of semi-annual certifications signed by the employee or a supervisory official with firsthand knowledge. These certifications provide assurance that salary costs charged to the federal program reflects the total activity for which the employee is compensated by the District, not exceeding 100% of compensated activities. Condition: The district did not maintain required semi-annual certifications for employees who worked solely on the Special Education Cluster (IDEA) programs. These certifications, which confirm that the employee worked 100% on the program for the period covered, were missing for all employees. Cause: The district did not have adequate procedures in place to ensure the forms were prepared, signed, and retained in accordance with federal requirements. Staff turnover and limited awareness of the documentation rules contributed to the oversight. Effect or Potential Effect: Without semi-annual certifications, the district lacks required documentation to fully support salary costs charged to the Special Education Cluster. This raises the risk that unallowable or unsupported personnel costs were charged to the program, even if employees were appropriately assigned. Questioned Costs: No questioned costs were identified, as auditors were able to verify through alternative procedures that employees worked solely on the program. The personnel records of the employees sampled contained approval of the employee to be hired into the appropriate job duties to be funded by special education cluster grant funds. Context: The district was unable to provide required semi-annual certifications for 14 out of 14 employees selected in our sample for testing. Recommendation: We recommend that the district develop and implement written procedures to ensure that semiannual certifications are prepared, signed, and retained for all employees working solely on federal programs. The district should provide training to finance and program staff to ensure continued compliance with federal documentation requirements. Views of Responsible Officials: District officials agree with the finding. The District has implemented new procedures in fiscal year 2025 to ensure semi-annual certifications are completed appropriately.
2024-007 Lack of Semi-Annual Certifications for Special Education Personnel Type of Finding: Material Weakness in Internal Control Over Compliance New or Repeat Finding: New Federal Program: Special Education Cluster (ALNs 84.027, 84.173) Federal Agency: U.S. Department of Education Pass-through Entity(ies): Texas Education Agency (246600010849086600, 246610010849086610, 66002406, 225350020849025000, 225360020849025360), Region 10 Education Service Center (236600497110001) Compliance Requirement: B - Allowable Costs / Costs Principles Criteria: Under 2 CFR 200.430(g), when employees work solely on a single federal award or cost objective, charges for their salaries must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. One allowable method is through completion of semi-annual certifications signed by the employee or a supervisory official with firsthand knowledge. These certifications provide assurance that salary costs charged to the federal program reflects the total activity for which the employee is compensated by the District, not exceeding 100% of compensated activities. Condition: The district did not maintain required semi-annual certifications for employees who worked solely on the Special Education Cluster (IDEA) programs. These certifications, which confirm that the employee worked 100% on the program for the period covered, were missing for all employees. Cause: The district did not have adequate procedures in place to ensure the forms were prepared, signed, and retained in accordance with federal requirements. Staff turnover and limited awareness of the documentation rules contributed to the oversight. Effect or Potential Effect: Without semi-annual certifications, the district lacks required documentation to fully support salary costs charged to the Special Education Cluster. This raises the risk that unallowable or unsupported personnel costs were charged to the program, even if employees were appropriately assigned. Questioned Costs: No questioned costs were identified, as auditors were able to verify through alternative procedures that employees worked solely on the program. The personnel records of the employees sampled contained approval of the employee to be hired into the appropriate job duties to be funded by special education cluster grant funds. Context: The district was unable to provide required semi-annual certifications for 14 out of 14 employees selected in our sample for testing. Recommendation: We recommend that the district develop and implement written procedures to ensure that semiannual certifications are prepared, signed, and retained for all employees working solely on federal programs. The district should provide training to finance and program staff to ensure continued compliance with federal documentation requirements. Views of Responsible Officials: District officials agree with the finding. The District has implemented new procedures in fiscal year 2025 to ensure semi-annual certifications are completed appropriately.
2024-007 Lack of Semi-Annual Certifications for Special Education Personnel Type of Finding: Material Weakness in Internal Control Over Compliance New or Repeat Finding: New Federal Program: Special Education Cluster (ALNs 84.027, 84.173) Federal Agency: U.S. Department of Education Pass-through Entity(ies): Texas Education Agency (246600010849086600, 246610010849086610, 66002406, 225350020849025000, 225360020849025360), Region 10 Education Service Center (236600497110001) Compliance Requirement: B - Allowable Costs / Costs Principles Criteria: Under 2 CFR 200.430(g), when employees work solely on a single federal award or cost objective, charges for their salaries must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. One allowable method is through completion of semi-annual certifications signed by the employee or a supervisory official with firsthand knowledge. These certifications provide assurance that salary costs charged to the federal program reflects the total activity for which the employee is compensated by the District, not exceeding 100% of compensated activities. Condition: The district did not maintain required semi-annual certifications for employees who worked solely on the Special Education Cluster (IDEA) programs. These certifications, which confirm that the employee worked 100% on the program for the period covered, were missing for all employees. Cause: The district did not have adequate procedures in place to ensure the forms were prepared, signed, and retained in accordance with federal requirements. Staff turnover and limited awareness of the documentation rules contributed to the oversight. Effect or Potential Effect: Without semi-annual certifications, the district lacks required documentation to fully support salary costs charged to the Special Education Cluster. This raises the risk that unallowable or unsupported personnel costs were charged to the program, even if employees were appropriately assigned. Questioned Costs: No questioned costs were identified, as auditors were able to verify through alternative procedures that employees worked solely on the program. The personnel records of the employees sampled contained approval of the employee to be hired into the appropriate job duties to be funded by special education cluster grant funds. Context: The district was unable to provide required semi-annual certifications for 14 out of 14 employees selected in our sample for testing. Recommendation: We recommend that the district develop and implement written procedures to ensure that semiannual certifications are prepared, signed, and retained for all employees working solely on federal programs. The district should provide training to finance and program staff to ensure continued compliance with federal documentation requirements. Views of Responsible Officials: District officials agree with the finding. The District has implemented new procedures in fiscal year 2025 to ensure semi-annual certifications are completed appropriately.
2024-007 Lack of Semi-Annual Certifications for Special Education Personnel Type of Finding: Material Weakness in Internal Control Over Compliance New or Repeat Finding: New Federal Program: Special Education Cluster (ALNs 84.027, 84.173) Federal Agency: U.S. Department of Education Pass-through Entity(ies): Texas Education Agency (246600010849086600, 246610010849086610, 66002406, 225350020849025000, 225360020849025360), Region 10 Education Service Center (236600497110001) Compliance Requirement: B - Allowable Costs / Costs Principles Criteria: Under 2 CFR 200.430(g), when employees work solely on a single federal award or cost objective, charges for their salaries must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. One allowable method is through completion of semi-annual certifications signed by the employee or a supervisory official with firsthand knowledge. These certifications provide assurance that salary costs charged to the federal program reflects the total activity for which the employee is compensated by the District, not exceeding 100% of compensated activities. Condition: The district did not maintain required semi-annual certifications for employees who worked solely on the Special Education Cluster (IDEA) programs. These certifications, which confirm that the employee worked 100% on the program for the period covered, were missing for all employees. Cause: The district did not have adequate procedures in place to ensure the forms were prepared, signed, and retained in accordance with federal requirements. Staff turnover and limited awareness of the documentation rules contributed to the oversight. Effect or Potential Effect: Without semi-annual certifications, the district lacks required documentation to fully support salary costs charged to the Special Education Cluster. This raises the risk that unallowable or unsupported personnel costs were charged to the program, even if employees were appropriately assigned. Questioned Costs: No questioned costs were identified, as auditors were able to verify through alternative procedures that employees worked solely on the program. The personnel records of the employees sampled contained approval of the employee to be hired into the appropriate job duties to be funded by special education cluster grant funds. Context: The district was unable to provide required semi-annual certifications for 14 out of 14 employees selected in our sample for testing. Recommendation: We recommend that the district develop and implement written procedures to ensure that semiannual certifications are prepared, signed, and retained for all employees working solely on federal programs. The district should provide training to finance and program staff to ensure continued compliance with federal documentation requirements. Views of Responsible Officials: District officials agree with the finding. The District has implemented new procedures in fiscal year 2025 to ensure semi-annual certifications are completed appropriately.
2024-007 Lack of Semi-Annual Certifications for Special Education Personnel Type of Finding: Material Weakness in Internal Control Over Compliance New or Repeat Finding: New Federal Program: Special Education Cluster (ALNs 84.027, 84.173) Federal Agency: U.S. Department of Education Pass-through Entity(ies): Texas Education Agency (246600010849086600, 246610010849086610, 66002406, 225350020849025000, 225360020849025360), Region 10 Education Service Center (236600497110001) Compliance Requirement: B - Allowable Costs / Costs Principles Criteria: Under 2 CFR 200.430(g), when employees work solely on a single federal award or cost objective, charges for their salaries must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. One allowable method is through completion of semi-annual certifications signed by the employee or a supervisory official with firsthand knowledge. These certifications provide assurance that salary costs charged to the federal program reflects the total activity for which the employee is compensated by the District, not exceeding 100% of compensated activities. Condition: The district did not maintain required semi-annual certifications for employees who worked solely on the Special Education Cluster (IDEA) programs. These certifications, which confirm that the employee worked 100% on the program for the period covered, were missing for all employees. Cause: The district did not have adequate procedures in place to ensure the forms were prepared, signed, and retained in accordance with federal requirements. Staff turnover and limited awareness of the documentation rules contributed to the oversight. Effect or Potential Effect: Without semi-annual certifications, the district lacks required documentation to fully support salary costs charged to the Special Education Cluster. This raises the risk that unallowable or unsupported personnel costs were charged to the program, even if employees were appropriately assigned. Questioned Costs: No questioned costs were identified, as auditors were able to verify through alternative procedures that employees worked solely on the program. The personnel records of the employees sampled contained approval of the employee to be hired into the appropriate job duties to be funded by special education cluster grant funds. Context: The district was unable to provide required semi-annual certifications for 14 out of 14 employees selected in our sample for testing. Recommendation: We recommend that the district develop and implement written procedures to ensure that semiannual certifications are prepared, signed, and retained for all employees working solely on federal programs. The district should provide training to finance and program staff to ensure continued compliance with federal documentation requirements. Views of Responsible Officials: District officials agree with the finding. The District has implemented new procedures in fiscal year 2025 to ensure semi-annual certifications are completed appropriately.
PROGRAM DESCRIPTION Reference Number: 2024-004 Proper review of payroll charges to grant funds ALN 84.425U & 84.425W COVID-19 Education Stabilization Fund Pass through identifying number: 21528001245902 Award Year: 2023-2024 Federal Agency: U.S. Department of Education Passed through State Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a) and 2 CFR 200.430(g) which requires that compensation charged to federal awards must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, of which documentation must be incorporated into the official records of the entity. Condition Found: During our review of payroll charges that were funded through ESSER funds, it was noted that the District did not have adequate controls in place to monitor the payroll transactions charged to the program. Cause: Although the District implemented Skyward in the prior year, the District did not integrate the appropriate approvals into the system in a timely manner. In addition, turnover in the District Chief Financial Officer position caused difficulties in the District obtaining the proper approvals for journal entries. Effect: The District could fail to appropriately support expenditures charged to the program. Questioned Cost: $0 Recommendation: We recommend the District to implement appropriate approvals in the Skyward accounting system to provide for better oversight of transactions. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 114.
PROGRAM DESCRIPTION Reference Number: 2024-004 Proper review of payroll charges to grant funds ALN 84.425U & 84.425W COVID-19 Education Stabilization Fund Pass through identifying number: 21528001245902 Award Year: 2023-2024 Federal Agency: U.S. Department of Education Passed through State Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a) and 2 CFR 200.430(g) which requires that compensation charged to federal awards must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, of which documentation must be incorporated into the official records of the entity. Condition Found: During our review of payroll charges that were funded through ESSER funds, it was noted that the District did not have adequate controls in place to monitor the payroll transactions charged to the program. Cause: Although the District implemented Skyward in the prior year, the District did not integrate the appropriate approvals into the system in a timely manner. In addition, turnover in the District Chief Financial Officer position caused difficulties in the District obtaining the proper approvals for journal entries. Effect: The District could fail to appropriately support expenditures charged to the program. Questioned Cost: $0 Recommendation: We recommend the District to implement appropriate approvals in the Skyward accounting system to provide for better oversight of transactions. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 114.
PROGRAM DESCRIPTION Reference Number: 2024-004 Proper review of payroll charges to grant funds ALN 84.425U & 84.425W COVID-19 Education Stabilization Fund Pass through identifying number: 21528001245902 Award Year: 2023-2024 Federal Agency: U.S. Department of Education Passed through State Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a) and 2 CFR 200.430(g) which requires that compensation charged to federal awards must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, of which documentation must be incorporated into the official records of the entity. Condition Found: During our review of payroll charges that were funded through ESSER funds, it was noted that the District did not have adequate controls in place to monitor the payroll transactions charged to the program. Cause: Although the District implemented Skyward in the prior year, the District did not integrate the appropriate approvals into the system in a timely manner. In addition, turnover in the District Chief Financial Officer position caused difficulties in the District obtaining the proper approvals for journal entries. Effect: The District could fail to appropriately support expenditures charged to the program. Questioned Cost: $0 Recommendation: We recommend the District to implement appropriate approvals in the Skyward accounting system to provide for better oversight of transactions. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 114.
PROGRAM DESCRIPTION Reference Number: 2024-004 Proper review of payroll charges to grant funds ALN 84.425U & 84.425W COVID-19 Education Stabilization Fund Pass through identifying number: 21528001245902 Award Year: 2023-2024 Federal Agency: U.S. Department of Education Passed through State Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a) and 2 CFR 200.430(g) which requires that compensation charged to federal awards must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, of which documentation must be incorporated into the official records of the entity. Condition Found: During our review of payroll charges that were funded through ESSER funds, it was noted that the District did not have adequate controls in place to monitor the payroll transactions charged to the program. Cause: Although the District implemented Skyward in the prior year, the District did not integrate the appropriate approvals into the system in a timely manner. In addition, turnover in the District Chief Financial Officer position caused difficulties in the District obtaining the proper approvals for journal entries. Effect: The District could fail to appropriately support expenditures charged to the program. Questioned Cost: $0 Recommendation: We recommend the District to implement appropriate approvals in the Skyward accounting system to provide for better oversight of transactions. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 114.
Allowable Costs/Activities Allowed – Personal Services Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases ALN: 93.323 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NU50CK000501-01-08, 6 NU50CK000501-02-17 August 1, 2019 – July 31, 2024, August 1, 2019 – July 31, 2027 Statistically Valid Sample: No, and not intended to be a statistically valid sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), the Texas Department of State Health Services (DSHS) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.430 Standards for Documentation of Personnel Expenses, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by an internal control system that ensures the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) comply with the established accounting policies and practices of the non-Federal entity; (vi) support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: DSHS requires its employees to complete monthly time and leave reporting, regardless of whether the employee works solely on a single federal award or cost objective, or on multiple activities or cost objectives. Each employee has a default task profile based on their position in the agency that determines how their payroll and payroll-related dollars are allocated. Employees are instructed and given training on how to report any deviations from their profile as well as report any vacation time, sick time, leave of absence, etc. Employees are required to certify their time by the 10th of the month for the previous months’ time. Like all DSHS employees, supervisors are required to certify their time monthly. However, their time certification includes an additional affirmation which states the supervisor has performed the following: Reviewed the default task profile/labor account code for each of their direct reports. Reviewed the timesheets for all direct reports as compared to the default task profiles/labor account codes for accuracy of time worked and adjusted if necessary. For direct reports who have reported deviations, reviewed and verified the deviations reported and approved the respective timesheet. This documented affirmation provides sufficient documentation to indicate that the supervisors have reviewed after the fact interim payroll and payroll-related charges made to federal awards based on budget estimates. Audit procedures included a selection of 40 payroll-related expenditures incurred during the fiscal year totaling $191,809. For five of the 40 samples selected, the employee supervisor did not certify their monthly timesheet, and thus did not acknowledge neither the review of the employees’ default task profile/account labor code or their timesheets. Questioned costs: None. Context: See “Condition.” Cause: All five of the exceptions noted were directly reporting to the same supervisor. The monthly timesheets selected were during the months of July and August 2024. The supervisor was recently hired in April 2024 and was unaware of the requirement to certify monthly. Effect: Without the supervisor timesheet certification, there is a lack of sufficient documentation to indicate that they have reviewed after-the-fact interim payroll and payroll-related charges made to the federal awards based on budget estimates. Repeat Finding: No Recommendation: DSHS should enhance new hire training policies and procedures to ensure all new hire trainings clearly address labor account codes, monthly time reporting, and task profiles. Views of responsible officials: DSHS has robust timekeeping controls but recognizes this opportunity to enhance training with reinforcement for new supervisors.
Allowable Costs/Activities Allowed – Personal Services Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases ALN: 93.323 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NU50CK000501-01-08, 6 NU50CK000501-02-17 August 1, 2019 – July 31, 2024, August 1, 2019 – July 31, 2027 Statistically Valid Sample: No, and not intended to be a statistically valid sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), the Texas Department of State Health Services (DSHS) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.430 Standards for Documentation of Personnel Expenses, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by an internal control system that ensures the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) comply with the established accounting policies and practices of the non-Federal entity; (vi) support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: DSHS requires its employees to complete monthly time and leave reporting, regardless of whether the employee works solely on a single federal award or cost objective, or on multiple activities or cost objectives. Each employee has a default task profile based on their position in the agency that determines how their payroll and payroll-related dollars are allocated. Employees are instructed and given training on how to report any deviations from their profile as well as report any vacation time, sick time, leave of absence, etc. Employees are required to certify their time by the 10th of the month for the previous months’ time. Like all DSHS employees, supervisors are required to certify their time monthly. However, their time certification includes an additional affirmation which states the supervisor has performed the following: Reviewed the default task profile/labor account code for each of their direct reports. Reviewed the timesheets for all direct reports as compared to the default task profiles/labor account codes for accuracy of time worked and adjusted if necessary. For direct reports who have reported deviations, reviewed and verified the deviations reported and approved the respective timesheet. This documented affirmation provides sufficient documentation to indicate that the supervisors have reviewed after the fact interim payroll and payroll-related charges made to federal awards based on budget estimates. Audit procedures included a selection of 40 payroll-related expenditures incurred during the fiscal year totaling $191,809. For five of the 40 samples selected, the employee supervisor did not certify their monthly timesheet, and thus did not acknowledge neither the review of the employees’ default task profile/account labor code or their timesheets. Questioned costs: None. Context: See “Condition.” Cause: All five of the exceptions noted were directly reporting to the same supervisor. The monthly timesheets selected were during the months of July and August 2024. The supervisor was recently hired in April 2024 and was unaware of the requirement to certify monthly. Effect: Without the supervisor timesheet certification, there is a lack of sufficient documentation to indicate that they have reviewed after-the-fact interim payroll and payroll-related charges made to the federal awards based on budget estimates. Repeat Finding: No Recommendation: DSHS should enhance new hire training policies and procedures to ensure all new hire trainings clearly address labor account codes, monthly time reporting, and task profiles. Views of responsible officials: DSHS has robust timekeeping controls but recognizes this opportunity to enhance training with reinforcement for new supervisors.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles – Personal Services Federal Agency: U.S. Department of Labor Federal Program Title: Employment Service Cluster ALN: 17.207, 17.801 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: DV373362255548–01, 23555DV000036–01, 24555DV000076–01 October 1, 2021 – December 31, 2023, October 1, 2022 – December 31, 2024, October 1, 2023 – December 31, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Nonompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), Texas Veterans Commission (TVC) must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Per 2 CFR 200.430 Standards for Documentation of Personnel Expenses, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: Audit procedures included a sample of 40 expenditures for incurred for personnel services during the fiscal year to test whether the expenditures for salaries and wages were allowable and based on the records that accurately reflect the work performed. We noted that TVC prepares monthly budget reports that are reviewed by the program’s budget analyst and the respective program director or manager. Expenditures related to personnel services are recorded based on the budgeted amount for each individual. No periodic after-the-fact review is performed to verify that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Questioned costs: None Context: See “Condition.” Cause: The employees working on the federal grant program are budgeted to work on the grant 100% of their time. Management deemed this sufficient to substantiate the final amounts charged to the grant. Effect: Lack of a periodic after-the-fact review to verify that the final amounts charged to the Federal award are accurate, allowable, and properly allocated may result in noncompliance with grant terms and conditions and questioned costs. Repeat Finding: No Recommendation: We recommend that management establish procedures and internal controls to perform an after-the-fact review of personnel services to verify that the final amounts charged to the Federal award are accurate, allowable, and properly allocated. This can be accomplished by a supervisor’s review and approval of the employee’s timesheet each pay period or an annual review where necessary adjustments are made. Views of responsible officials: TVC agrees to the recommendation of documenting review and approvals. To note, the monthly Veteran Employment Services (VES) Forecasts and Payroll reports had been reviewed with VES’s Director and/or Operations Manager as well as VES’s Annual State Plan before submission to the U.S. Department of Labor. VES’s Director or Operations Manager’s signature of approval was never documented for confirmation of review.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles – Personal Services Federal Agency: U.S. Department of Labor Federal Program Title: Employment Service Cluster ALN: 17.207, 17.801 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: DV373362255548–01, 23555DV000036–01, 24555DV000076–01 October 1, 2021 – December 31, 2023, October 1, 2022 – December 31, 2024, October 1, 2023 – December 31, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Nonompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), Texas Veterans Commission (TVC) must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Per 2 CFR 200.430 Standards for Documentation of Personnel Expenses, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: Audit procedures included a sample of 40 expenditures for incurred for personnel services during the fiscal year to test whether the expenditures for salaries and wages were allowable and based on the records that accurately reflect the work performed. We noted that TVC prepares monthly budget reports that are reviewed by the program’s budget analyst and the respective program director or manager. Expenditures related to personnel services are recorded based on the budgeted amount for each individual. No periodic after-the-fact review is performed to verify that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Questioned costs: None Context: See “Condition.” Cause: The employees working on the federal grant program are budgeted to work on the grant 100% of their time. Management deemed this sufficient to substantiate the final amounts charged to the grant. Effect: Lack of a periodic after-the-fact review to verify that the final amounts charged to the Federal award are accurate, allowable, and properly allocated may result in noncompliance with grant terms and conditions and questioned costs. Repeat Finding: No Recommendation: We recommend that management establish procedures and internal controls to perform an after-the-fact review of personnel services to verify that the final amounts charged to the Federal award are accurate, allowable, and properly allocated. This can be accomplished by a supervisor’s review and approval of the employee’s timesheet each pay period or an annual review where necessary adjustments are made. Views of responsible officials: TVC agrees to the recommendation of documenting review and approvals. To note, the monthly Veteran Employment Services (VES) Forecasts and Payroll reports had been reviewed with VES’s Director and/or Operations Manager as well as VES’s Annual State Plan before submission to the U.S. Department of Labor. VES’s Director or Operations Manager’s signature of approval was never documented for confirmation of review.
Section 2 - Federal and State Award Findings and Questioned Costs Significant Deficiency 2024-001 Payroll costs were allocated to incorrect programs Prevention and Treatment of Substance Abuse, CFDA #93.959, Pass-Through Grant #HHS000539700192 Criteria: In accordance with Uniform Guidance (2 CFR § 200.430g), payroll costs must be charged accurately to federal awards and should be supported by records that appropriately reflect the work performed. Condition: Payroll costs reported for the associated programs under pass-through grant #HHS000539700192 totaling approximately $30,242 were erroneously charged to the incorrect program. Cause: The issue was caused by coding errors in the accounting system during payroll processing. The responsible personnel mistakenly allocated the employees' hours to incorrect program codes for certain employees and pay periods without adequate review and reconciliation to the source timesheets. Effect: Payroll costs for the individual programs under CFDA #93.959, Pass-Through Grant #HHS000539700192 were overstated in total by approximately $30,242. Questioned Costs: Approximately $30,242 Context: The finding was isolated to payroll costs and for only certain employees and pay periods, and no findings were identified related to other non-personnel direct or indirect costs or other compliance requirements. Repeat Finding: No Recommendation: We recommend that the Organization strengthen internal controls over payroll cost allocations, including adding an additional layer of review over payroll and ensuring the payroll data in the accounting system is properly reconciled to the employees' timesheets each pay period. Additionally, as possible, we recommend configuring validation controls in the accounting system to help prevent employees from being charged to incorrect program codes. Views of Responsible Officials and Planned Corrections Actions: Management agrees with the audit finding and a response is included in the corrective action plan.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: Under 2 CFR 200.430, payroll expenses must be based on records that accurately reflect the work performed and supported by a system of internal control that provides reasonable assurance that charges are accurate, allowable, and properly allocated. Condition: During the testing performed, it was noted that the Organization transferred payroll costs between programs, however, no time and effort certification or equivalent documentation was updated to reflect the changes. Additionally, the transfer of payroll costs between grants was not properly reflected within the accounting system records by grant. These transfers between grants were completed after the end of the fiscal year. Cause: During the year the Organization had new grants, but the payroll system was not updated to reflect the changes. Effect: Allocation of payroll costs to the federal award program may be inaccurate or not properly documented. Questioned costs: n/a Context: The Organization did not maintain supporting documentation for payroll costs that were reallocated to a new grant. These costs were reallocated from the Health Center Program and from the Healthy Start Initiative funding to the new award. Repeat Finding: No Recommendation: The Organization should review and update the policies and procedures regarding payroll costs. Additionally, the Organization should provide training to staff on grant tracking and documentation. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future changes in payroll costs are updated timely within the system and documentation maintained.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: Under 2 CFR 200.430, payroll expenses must be based on records that accurately reflect the work performed and supported by a system of internal control that provides reasonable assurance that charges are accurate, allowable, and properly allocated. Condition: During the testing performed, it was noted that the Organization transferred payroll costs between programs, however, no time and effort certification or equivalent documentation was updated to reflect the changes. Additionally, the transfer of payroll costs between grants was not properly reflected within the accounting system records by grant. These transfers between grants were completed after the end of the fiscal year. Cause: During the year the Organization had new grants, but the payroll system was not updated to reflect the changes. Effect: Allocation of payroll costs to the federal award program may be inaccurate or not properly documented. Questioned costs: n/a Context: The Organization did not maintain supporting documentation for payroll costs that were reallocated to a new grant. These costs were reallocated from the Health Center Program and from the Healthy Start Initiative funding to the new award. Repeat Finding: No Recommendation: The Organization should review and update the policies and procedures regarding payroll costs. Additionally, the Organization should provide training to staff on grant tracking and documentation. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future changes in payroll costs are updated timely within the system and documentation maintained.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: Under 2 CFR 200.430, payroll expenses must be based on records that accurately reflect the work performed and supported by a system of internal control that provides reasonable assurance that charges are accurate, allowable, and properly allocated. Condition: During the testing performed, it was noted that the Organization transferred payroll costs between programs, however, no time and effort certification or equivalent documentation was updated to reflect the changes. Additionally, the transfer of payroll costs between grants was not properly reflected within the accounting system records by grant. These transfers between grants were completed after the end of the fiscal year. Cause: During the year the Organization had new grants, but the payroll system was not updated to reflect the changes. Effect: Allocation of payroll costs to the federal award program may be inaccurate or not properly documented. Questioned costs: n/a Context: The Organization did not maintain supporting documentation for payroll costs that were reallocated to a new grant. These costs were reallocated from the Health Center Program and from the Healthy Start Initiative funding to the new award. Repeat Finding: No Recommendation: The Organization should review and update the policies and procedures regarding payroll costs. Additionally, the Organization should provide training to staff on grant tracking and documentation. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future changes in payroll costs are updated timely within the system and documentation maintained.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: Under 2 CFR 200.430, payroll expenses must be based on records that accurately reflect the work performed and supported by a system of internal control that provides reasonable assurance that charges are accurate, allowable, and properly allocated. Condition: During the testing performed, it was noted that the Organization transferred payroll costs between programs, however, no time and effort certification or equivalent documentation was updated to reflect the changes. Additionally, the transfer of payroll costs between grants was not properly reflected within the accounting system records by grant. These transfers between grants were completed after the end of the fiscal year. Cause: During the year the Organization had new grants, but the payroll system was not updated to reflect the changes. Effect: Allocation of payroll costs to the federal award program may be inaccurate or not properly documented. Questioned costs: n/a Context: The Organization did not maintain supporting documentation for payroll costs that were reallocated to a new grant. These costs were reallocated from the Health Center Program and from the Healthy Start Initiative funding to the new award. Repeat Finding: No Recommendation: The Organization should review and update the policies and procedures regarding payroll costs. Additionally, the Organization should provide training to staff on grant tracking and documentation. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future changes in payroll costs are updated timely within the system and documentation maintained.
Finding Number 2024-001: Represents a significant deficiency in internal control over compliance with Western Maine Community Action, Inc.’s major federal programs. Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control Over Compliance Description: Payroll Expenditures – Approval of Time Sheets Major Programs: AL#10.557 - WIC Special Supplemental Nutrition Program for Women, Infants and Children – Award numbers: CD3-22-4658B and CD3-24-4658A; AL#81.042 – Weatherization – 80224, 80225, 81323, and 84023; AL#93.569 – Community Services Block Grant – Award numbers: CFS-23-7009 and CFS-24-7009 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of a sample of 80 payroll transactions there were 3 where the timesheet was not properly approved by the supervisor prior to payroll being processed. Criteria: 2 CFR 200.430(i) states that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. Cause: The Organization does not have the proper review process in place to ensure that the timesheets are reviewed by supervisors prior to payroll being processed. Effect: Without proper review and approval of the hours allocated to the grants on the employee timesheets, it is possible that grants could be over or undercharged. Recommendation: We recommend the Organization implement systems and procedures to ensure timesheets are approved by supervisors prior to payroll being processed, to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the findings and has committed to a corrective action plan.
Finding Number 2024-001: Represents a significant deficiency in internal control over compliance with Western Maine Community Action, Inc.’s major federal programs. Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control Over Compliance Description: Payroll Expenditures – Approval of Time Sheets Major Programs: AL#10.557 - WIC Special Supplemental Nutrition Program for Women, Infants and Children – Award numbers: CD3-22-4658B and CD3-24-4658A; AL#81.042 – Weatherization – 80224, 80225, 81323, and 84023; AL#93.569 – Community Services Block Grant – Award numbers: CFS-23-7009 and CFS-24-7009 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of a sample of 80 payroll transactions there were 3 where the timesheet was not properly approved by the supervisor prior to payroll being processed. Criteria: 2 CFR 200.430(i) states that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. Cause: The Organization does not have the proper review process in place to ensure that the timesheets are reviewed by supervisors prior to payroll being processed. Effect: Without proper review and approval of the hours allocated to the grants on the employee timesheets, it is possible that grants could be over or undercharged. Recommendation: We recommend the Organization implement systems and procedures to ensure timesheets are approved by supervisors prior to payroll being processed, to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the findings and has committed to a corrective action plan.
Finding Number 2024-001: Represents a significant deficiency in internal control over compliance with Western Maine Community Action, Inc.’s major federal programs. Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control Over Compliance Description: Payroll Expenditures – Approval of Time Sheets Major Programs: AL#10.557 - WIC Special Supplemental Nutrition Program for Women, Infants and Children – Award numbers: CD3-22-4658B and CD3-24-4658A; AL#81.042 – Weatherization – 80224, 80225, 81323, and 84023; AL#93.569 – Community Services Block Grant – Award numbers: CFS-23-7009 and CFS-24-7009 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of a sample of 80 payroll transactions there were 3 where the timesheet was not properly approved by the supervisor prior to payroll being processed. Criteria: 2 CFR 200.430(i) states that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. Cause: The Organization does not have the proper review process in place to ensure that the timesheets are reviewed by supervisors prior to payroll being processed. Effect: Without proper review and approval of the hours allocated to the grants on the employee timesheets, it is possible that grants could be over or undercharged. Recommendation: We recommend the Organization implement systems and procedures to ensure timesheets are approved by supervisors prior to payroll being processed, to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the findings and has committed to a corrective action plan.
Finding Number 2024-001: Represents a significant deficiency in internal control over compliance with Western Maine Community Action, Inc.’s major federal programs. Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control Over Compliance Description: Payroll Expenditures – Approval of Time Sheets Major Programs: AL#10.557 - WIC Special Supplemental Nutrition Program for Women, Infants and Children – Award numbers: CD3-22-4658B and CD3-24-4658A; AL#81.042 – Weatherization – 80224, 80225, 81323, and 84023; AL#93.569 – Community Services Block Grant – Award numbers: CFS-23-7009 and CFS-24-7009 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of a sample of 80 payroll transactions there were 3 where the timesheet was not properly approved by the supervisor prior to payroll being processed. Criteria: 2 CFR 200.430(i) states that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. Cause: The Organization does not have the proper review process in place to ensure that the timesheets are reviewed by supervisors prior to payroll being processed. Effect: Without proper review and approval of the hours allocated to the grants on the employee timesheets, it is possible that grants could be over or undercharged. Recommendation: We recommend the Organization implement systems and procedures to ensure timesheets are approved by supervisors prior to payroll being processed, to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the findings and has committed to a corrective action plan.
Finding Number 2024-001: Represents a significant deficiency in internal control over compliance with Western Maine Community Action, Inc.’s major federal programs. Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control Over Compliance Description: Payroll Expenditures – Approval of Time Sheets Major Programs: AL#10.557 - WIC Special Supplemental Nutrition Program for Women, Infants and Children – Award numbers: CD3-22-4658B and CD3-24-4658A; AL#81.042 – Weatherization – 80224, 80225, 81323, and 84023; AL#93.569 – Community Services Block Grant – Award numbers: CFS-23-7009 and CFS-24-7009 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of a sample of 80 payroll transactions there were 3 where the timesheet was not properly approved by the supervisor prior to payroll being processed. Criteria: 2 CFR 200.430(i) states that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. Cause: The Organization does not have the proper review process in place to ensure that the timesheets are reviewed by supervisors prior to payroll being processed. Effect: Without proper review and approval of the hours allocated to the grants on the employee timesheets, it is possible that grants could be over or undercharged. Recommendation: We recommend the Organization implement systems and procedures to ensure timesheets are approved by supervisors prior to payroll being processed, to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the findings and has committed to a corrective action plan.
2024-007 Lack of Semi-Annual Certifications for Special Education Personnel Type of Finding: Material Weakness in Internal Control Over Compliance New or Repeat Finding: New Federal Program: Special Education Cluster (ALNs 84.027, 84.173) Federal Agency: U.S. Department of Education Pass-through Entity(ies): Texas Education Agency (246600010849086600, 246610010849086610, 66002406, 225350020849025000, 225360020849025360), Region 10 Education Service Center (236600497110001) Compliance Requirement: B - Allowable Costs / Costs Principles Criteria: Under 2 CFR 200.430(g), when employees work solely on a single federal award or cost objective, charges for their salaries must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. One allowable method is through completion of semi-annual certifications signed by the employee or a supervisory official with firsthand knowledge. These certifications provide assurance that salary costs charged to the federal program reflects the total activity for which the employee is compensated by the District, not exceeding 100% of compensated activities. Condition: The district did not maintain required semi-annual certifications for employees who worked solely on the Special Education Cluster (IDEA) programs. These certifications, which confirm that the employee worked 100% on the program for the period covered, were missing for all employees. Cause: The district did not have adequate procedures in place to ensure the forms were prepared, signed, and retained in accordance with federal requirements. Staff turnover and limited awareness of the documentation rules contributed to the oversight. Effect or Potential Effect: Without semi-annual certifications, the district lacks required documentation to fully support salary costs charged to the Special Education Cluster. This raises the risk that unallowable or unsupported personnel costs were charged to the program, even if employees were appropriately assigned. Questioned Costs: No questioned costs were identified, as auditors were able to verify through alternative procedures that employees worked solely on the program. The personnel records of the employees sampled contained approval of the employee to be hired into the appropriate job duties to be funded by special education cluster grant funds. Context: The district was unable to provide required semi-annual certifications for 14 out of 14 employees selected in our sample for testing. Recommendation: We recommend that the district develop and implement written procedures to ensure that semiannual certifications are prepared, signed, and retained for all employees working solely on federal programs. The district should provide training to finance and program staff to ensure continued compliance with federal documentation requirements. Views of Responsible Officials: District officials agree with the finding. The District has implemented new procedures in fiscal year 2025 to ensure semi-annual certifications are completed appropriately.
2024-007 Lack of Semi-Annual Certifications for Special Education Personnel Type of Finding: Material Weakness in Internal Control Over Compliance New or Repeat Finding: New Federal Program: Special Education Cluster (ALNs 84.027, 84.173) Federal Agency: U.S. Department of Education Pass-through Entity(ies): Texas Education Agency (246600010849086600, 246610010849086610, 66002406, 225350020849025000, 225360020849025360), Region 10 Education Service Center (236600497110001) Compliance Requirement: B - Allowable Costs / Costs Principles Criteria: Under 2 CFR 200.430(g), when employees work solely on a single federal award or cost objective, charges for their salaries must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. One allowable method is through completion of semi-annual certifications signed by the employee or a supervisory official with firsthand knowledge. These certifications provide assurance that salary costs charged to the federal program reflects the total activity for which the employee is compensated by the District, not exceeding 100% of compensated activities. Condition: The district did not maintain required semi-annual certifications for employees who worked solely on the Special Education Cluster (IDEA) programs. These certifications, which confirm that the employee worked 100% on the program for the period covered, were missing for all employees. Cause: The district did not have adequate procedures in place to ensure the forms were prepared, signed, and retained in accordance with federal requirements. Staff turnover and limited awareness of the documentation rules contributed to the oversight. Effect or Potential Effect: Without semi-annual certifications, the district lacks required documentation to fully support salary costs charged to the Special Education Cluster. This raises the risk that unallowable or unsupported personnel costs were charged to the program, even if employees were appropriately assigned. Questioned Costs: No questioned costs were identified, as auditors were able to verify through alternative procedures that employees worked solely on the program. The personnel records of the employees sampled contained approval of the employee to be hired into the appropriate job duties to be funded by special education cluster grant funds. Context: The district was unable to provide required semi-annual certifications for 14 out of 14 employees selected in our sample for testing. Recommendation: We recommend that the district develop and implement written procedures to ensure that semiannual certifications are prepared, signed, and retained for all employees working solely on federal programs. The district should provide training to finance and program staff to ensure continued compliance with federal documentation requirements. Views of Responsible Officials: District officials agree with the finding. The District has implemented new procedures in fiscal year 2025 to ensure semi-annual certifications are completed appropriately.