Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.
2024-001 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Time and effort certifications were not maintained for all grant employees. Cause: Turnover in a key administrative position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $474,848.34 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees. Views of Responsible Official: Management agrees with the finding.
2024-001 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Time and effort certifications were not maintained for all grant employees. Cause: Turnover in a key administrative position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $474,848.34 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees. Views of Responsible Official: Management agrees with the finding.
2024-001 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Time and effort certifications were not maintained for all grant employees. Cause: Turnover in a key administrative position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $474,848.34 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees. Views of Responsible Official: Management agrees with the finding.
2024-001 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Time and effort certifications were not maintained for all grant employees. Cause: Turnover in a key administrative position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $474,848.34 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees. Views of Responsible Official: Management agrees with the finding.
2024-001 U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Time and effort certifications were not maintained for all grant employees. Cause: Turnover in a key administrative position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $474,848.34 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees. Views of Responsible Official: Management agrees with the finding.
Assistance Listing, Federal Agency, and Program Name - 84.217, 84.042, 84.066, 84.047, 84.044 TRIO Cluster ("TRIO"), and 84.027 Special Education Cluster ("IDEA") Federal Award Identification Number and Year - TRIO - All Federal Award Identifications IDEA - 700005133 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - Yes - 2023 001 Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed, including complying with established accounting policies and practices of the University. Per the University policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair, or dean) of the work performed approximately 30 days after each reporting period. Condition Of the 11 employees included in the hourly payroll expenditure sample selected for testing in the TRIO Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 1 employee. Of the 7 employees included in the hourly payroll expenditure sample selected for testing in the Special Education Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 5 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 6 of the total 18 employees tested in these two programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - The university implemented a new grant management software in June 2024 that provides greater functionality to complete the effort certification process within the time requirement identified in the University's Time and Effort Reporting Policy. Winter Semester 2024 was certified timely under the new system and the university considers the finding to be fully corrected. Please note that this finding occurred prior to the implementation of the new system.
Assistance Listing, Federal Agency, and Program Name - 84.217, 84.042, 84.066, 84.047, 84.044 TRIO Cluster ("TRIO"), and 84.027 Special Education Cluster ("IDEA") Federal Award Identification Number and Year - TRIO - All Federal Award Identifications IDEA - 700005133 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - Yes - 2023 001 Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed, including complying with established accounting policies and practices of the University. Per the University policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair, or dean) of the work performed approximately 30 days after each reporting period. Condition Of the 11 employees included in the hourly payroll expenditure sample selected for testing in the TRIO Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 1 employee. Of the 7 employees included in the hourly payroll expenditure sample selected for testing in the Special Education Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 5 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 6 of the total 18 employees tested in these two programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - The university implemented a new grant management software in June 2024 that provides greater functionality to complete the effort certification process within the time requirement identified in the University's Time and Effort Reporting Policy. Winter Semester 2024 was certified timely under the new system and the university considers the finding to be fully corrected. Please note that this finding occurred prior to the implementation of the new system.
Assistance Listing, Federal Agency, and Program Name - 84.217, 84.042, 84.066, 84.047, 84.044 TRIO Cluster ("TRIO"), and 84.027 Special Education Cluster ("IDEA") Federal Award Identification Number and Year - TRIO - All Federal Award Identifications IDEA - 700005133 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - Yes - 2023 001 Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed, including complying with established accounting policies and practices of the University. Per the University policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair, or dean) of the work performed approximately 30 days after each reporting period. Condition Of the 11 employees included in the hourly payroll expenditure sample selected for testing in the TRIO Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 1 employee. Of the 7 employees included in the hourly payroll expenditure sample selected for testing in the Special Education Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 5 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 6 of the total 18 employees tested in these two programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - The university implemented a new grant management software in June 2024 that provides greater functionality to complete the effort certification process within the time requirement identified in the University's Time and Effort Reporting Policy. Winter Semester 2024 was certified timely under the new system and the university considers the finding to be fully corrected. Please note that this finding occurred prior to the implementation of the new system.
Assistance Listing, Federal Agency, and Program Name - 84.217, 84.042, 84.066, 84.047, 84.044 TRIO Cluster ("TRIO"), and 84.027 Special Education Cluster ("IDEA") Federal Award Identification Number and Year - TRIO - All Federal Award Identifications IDEA - 700005133 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - Yes - 2023 001 Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed, including complying with established accounting policies and practices of the University. Per the University policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair, or dean) of the work performed approximately 30 days after each reporting period. Condition Of the 11 employees included in the hourly payroll expenditure sample selected for testing in the TRIO Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 1 employee. Of the 7 employees included in the hourly payroll expenditure sample selected for testing in the Special Education Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 5 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 6 of the total 18 employees tested in these two programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - The university implemented a new grant management software in June 2024 that provides greater functionality to complete the effort certification process within the time requirement identified in the University's Time and Effort Reporting Policy. Winter Semester 2024 was certified timely under the new system and the university considers the finding to be fully corrected. Please note that this finding occurred prior to the implementation of the new system.
Assistance Listing, Federal Agency, and Program Name - 84.217, 84.042, 84.066, 84.047, 84.044 TRIO Cluster ("TRIO"), and 84.027 Special Education Cluster ("IDEA") Federal Award Identification Number and Year - TRIO - All Federal Award Identifications IDEA - 700005133 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - Yes - 2023 001 Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed, including complying with established accounting policies and practices of the University. Per the University policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair, or dean) of the work performed approximately 30 days after each reporting period. Condition Of the 11 employees included in the hourly payroll expenditure sample selected for testing in the TRIO Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 1 employee. Of the 7 employees included in the hourly payroll expenditure sample selected for testing in the Special Education Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 5 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 6 of the total 18 employees tested in these two programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - The university implemented a new grant management software in June 2024 that provides greater functionality to complete the effort certification process within the time requirement identified in the University's Time and Effort Reporting Policy. Winter Semester 2024 was certified timely under the new system and the university considers the finding to be fully corrected. Please note that this finding occurred prior to the implementation of the new system.
Assistance Listing, Federal Agency, and Program Name - 84.217, 84.042, 84.066, 84.047, 84.044 TRIO Cluster ("TRIO"), and 84.027 Special Education Cluster ("IDEA") Federal Award Identification Number and Year - TRIO - All Federal Award Identifications IDEA - 700005133 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - Yes - 2023 001 Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed, including complying with established accounting policies and practices of the University. Per the University policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair, or dean) of the work performed approximately 30 days after each reporting period. Condition Of the 11 employees included in the hourly payroll expenditure sample selected for testing in the TRIO Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 1 employee. Of the 7 employees included in the hourly payroll expenditure sample selected for testing in the Special Education Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 5 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 6 of the total 18 employees tested in these two programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - The university implemented a new grant management software in June 2024 that provides greater functionality to complete the effort certification process within the time requirement identified in the University's Time and Effort Reporting Policy. Winter Semester 2024 was certified timely under the new system and the university considers the finding to be fully corrected. Please note that this finding occurred prior to the implementation of the new system.
Assistance Listing, Federal Agency, and Program Name - 84.217, 84.042, 84.066, 84.047, 84.044 TRIO Cluster ("TRIO"), and 84.027 Special Education Cluster ("IDEA") Federal Award Identification Number and Year - TRIO - All Federal Award Identifications IDEA - 700005133 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - Yes - 2023 001 Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed, including complying with established accounting policies and practices of the University. Per the University policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair, or dean) of the work performed approximately 30 days after each reporting period. Condition Of the 11 employees included in the hourly payroll expenditure sample selected for testing in the TRIO Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 1 employee. Of the 7 employees included in the hourly payroll expenditure sample selected for testing in the Special Education Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 5 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 6 of the total 18 employees tested in these two programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - The university implemented a new grant management software in June 2024 that provides greater functionality to complete the effort certification process within the time requirement identified in the University's Time and Effort Reporting Policy. Winter Semester 2024 was certified timely under the new system and the university considers the finding to be fully corrected. Please note that this finding occurred prior to the implementation of the new system.
Assistance Listing, Federal Agency, and Program Name - 84.217, 84.042, 84.066, 84.047, 84.044 TRIO Cluster ("TRIO"), and 84.027 Special Education Cluster ("IDEA") Federal Award Identification Number and Year - TRIO - All Federal Award Identifications IDEA - 700005133 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - Yes - 2023 001 Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed, including complying with established accounting policies and practices of the University. Per the University policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair, or dean) of the work performed approximately 30 days after each reporting period. Condition Of the 11 employees included in the hourly payroll expenditure sample selected for testing in the TRIO Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 1 employee. Of the 7 employees included in the hourly payroll expenditure sample selected for testing in the Special Education Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 5 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 6 of the total 18 employees tested in these two programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - The university implemented a new grant management software in June 2024 that provides greater functionality to complete the effort certification process within the time requirement identified in the University's Time and Effort Reporting Policy. Winter Semester 2024 was certified timely under the new system and the university considers the finding to be fully corrected. Please note that this finding occurred prior to the implementation of the new system.
Assistance Listing, Federal Agency, and Program Name - 84.217, 84.042, 84.066, 84.047, 84.044 TRIO Cluster ("TRIO"), and 84.027 Special Education Cluster ("IDEA") Federal Award Identification Number and Year - TRIO - All Federal Award Identifications IDEA - 700005133 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - Yes - 2023 001 Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed, including complying with established accounting policies and practices of the University. Per the University policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair, or dean) of the work performed approximately 30 days after each reporting period. Condition Of the 11 employees included in the hourly payroll expenditure sample selected for testing in the TRIO Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 1 employee. Of the 7 employees included in the hourly payroll expenditure sample selected for testing in the Special Education Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 5 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 6 of the total 18 employees tested in these two programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - The university implemented a new grant management software in June 2024 that provides greater functionality to complete the effort certification process within the time requirement identified in the University's Time and Effort Reporting Policy. Winter Semester 2024 was certified timely under the new system and the university considers the finding to be fully corrected. Please note that this finding occurred prior to the implementation of the new system.
Assistance Listing, Federal Agency, and Program Name - 84.217, 84.042, 84.066, 84.047, 84.044 TRIO Cluster ("TRIO"), and 84.027 Special Education Cluster ("IDEA") Federal Award Identification Number and Year - TRIO - All Federal Award Identifications IDEA - 700005133 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - Yes - 2023 001 Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed, including complying with established accounting policies and practices of the University. Per the University policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair, or dean) of the work performed approximately 30 days after each reporting period. Condition Of the 11 employees included in the hourly payroll expenditure sample selected for testing in the TRIO Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 1 employee. Of the 7 employees included in the hourly payroll expenditure sample selected for testing in the Special Education Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 5 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 6 of the total 18 employees tested in these two programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - The university implemented a new grant management software in June 2024 that provides greater functionality to complete the effort certification process within the time requirement identified in the University's Time and Effort Reporting Policy. Winter Semester 2024 was certified timely under the new system and the university considers the finding to be fully corrected. Please note that this finding occurred prior to the implementation of the new system.
Assistance Listing, Federal Agency, and Program Name - 84.217, 84.042, 84.066, 84.047, 84.044 TRIO Cluster ("TRIO"), and 84.027 Special Education Cluster ("IDEA") Federal Award Identification Number and Year - TRIO - All Federal Award Identifications IDEA - 700005133 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - Yes - 2023 001 Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed, including complying with established accounting policies and practices of the University. Per the University policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair, or dean) of the work performed approximately 30 days after each reporting period. Condition Of the 11 employees included in the hourly payroll expenditure sample selected for testing in the TRIO Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 1 employee. Of the 7 employees included in the hourly payroll expenditure sample selected for testing in the Special Education Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 5 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 6 of the total 18 employees tested in these two programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - The university implemented a new grant management software in June 2024 that provides greater functionality to complete the effort certification process within the time requirement identified in the University's Time and Effort Reporting Policy. Winter Semester 2024 was certified timely under the new system and the university considers the finding to be fully corrected. Please note that this finding occurred prior to the implementation of the new system.
Assistance Listing, Federal Agency, and Program Name - 84.217, 84.042, 84.066, 84.047, 84.044 TRIO Cluster ("TRIO"), and 84.027 Special Education Cluster ("IDEA") Federal Award Identification Number and Year - TRIO - All Federal Award Identifications IDEA - 700005133 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - Yes - 2023 001 Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed, including complying with established accounting policies and practices of the University. Per the University policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair, or dean) of the work performed approximately 30 days after each reporting period. Condition Of the 11 employees included in the hourly payroll expenditure sample selected for testing in the TRIO Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 1 employee. Of the 7 employees included in the hourly payroll expenditure sample selected for testing in the Special Education Cluster, the University did not complete a full, executed review of the effort certifications with the time period outlined for 5 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 6 of the total 18 employees tested in these two programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - The university implemented a new grant management software in June 2024 that provides greater functionality to complete the effort certification process within the time requirement identified in the University's Time and Effort Reporting Policy. Winter Semester 2024 was certified timely under the new system and the university considers the finding to be fully corrected. Please note that this finding occurred prior to the implementation of the new system.
During our audit, we noted that the County charged payroll costs to federal grants based on budgeted time allocations rather than actual time spent on grant activities. The County lacked sufficient documentation to support the actual time worked on the grant program and did not perform a true-up or reconciliation process to adjust these charges to reflect the actual effort expended on the grant projects.The absence of a reconciliation process between budgeted and actual time spent on grant activities may have resulted in inaccurate charges to federal awards. This could potentially lead to questioned costs and impact the allowability of payroll expenses charged to the grants. The County’s policies and procedures did not include a process for reconciling budgeted payroll allocations to actual time spent on grant activities. Additionally, there was a lack of understanding among some department personnel regarding the requirement to base final charges on actual effort rather than budget estimates. As provided in 2 CFR §200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Payroll distribution records must reasonably reflect an employee’s total activity and support the allocation of salary or wages across specific activities. The County should strengthen its comprehensive internal control policies and procedures to ensure that payroll costs charged to federal awards are accurate, allowable, and properly supported. Additionally, the County should implement a process to reconcile the budgeted payroll allocations with actual time spent on grant activities. The County's corrective action plan at the end of this report includes the views and planned actions of its responsible officials. We are not required to audit and have not audited these responses or corrective actions and therefore we provide no assurances as to their accuracy.
During our audit, we noted that the County charged payroll costs to federal grants based on budgeted time allocations rather than actual time spent on grant activities. The County lacked sufficient documentation to support the actual time worked on the grant program and did not perform a true-up or reconciliation process to adjust these charges to reflect the actual effort expended on the grant projects.The absence of a reconciliation process between budgeted and actual time spent on grant activities may have resulted in inaccurate charges to federal awards. This could potentially lead to questioned costs and impact the allowability of payroll expenses charged to the grants. The County’s policies and procedures did not include a process for reconciling budgeted payroll allocations to actual time spent on grant activities. Additionally, there was a lack of understanding among some department personnel regarding the requirement to base final charges on actual effort rather than budget estimates. As provided in 2 CFR §200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Payroll distribution records must reasonably reflect an employee’s total activity and support the allocation of salary or wages across specific activities. The County should strengthen its comprehensive internal control policies and procedures to ensure that payroll costs charged to federal awards are accurate, allowable, and properly supported. Additionally, the County should implement a process to reconcile the budgeted payroll allocations with actual time spent on grant activities. The County's corrective action plan at the end of this report includes the views and planned actions of its responsible officials. We are not required to audit and have not audited these responses or corrective actions and therefore we provide no assurances as to their accuracy.
During our audit, we noted that the County charged payroll costs to federal grants based on budgeted time allocations rather than actual time spent on grant activities. The County lacked sufficient documentation to support the actual time worked on the grant program and did not perform a true-up or reconciliation process to adjust these charges to reflect the actual effort expended on the grant projects.The absence of a reconciliation process between budgeted and actual time spent on grant activities may have resulted in inaccurate charges to federal awards. This could potentially lead to questioned costs and impact the allowability of payroll expenses charged to the grants. The County’s policies and procedures did not include a process for reconciling budgeted payroll allocations to actual time spent on grant activities. Additionally, there was a lack of understanding among some department personnel regarding the requirement to base final charges on actual effort rather than budget estimates. As provided in 2 CFR §200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Payroll distribution records must reasonably reflect an employee’s total activity and support the allocation of salary or wages across specific activities. The County should strengthen its comprehensive internal control policies and procedures to ensure that payroll costs charged to federal awards are accurate, allowable, and properly supported. Additionally, the County should implement a process to reconcile the budgeted payroll allocations with actual time spent on grant activities. The County's corrective action plan at the end of this report includes the views and planned actions of its responsible officials. We are not required to audit and have not audited these responses or corrective actions and therefore we provide no assurances as to their accuracy.
During our audit, we noted that the County charged payroll costs to federal grants based on budgeted time allocations rather than actual time spent on grant activities. The County lacked sufficient documentation to support the actual time worked on the grant program and did not perform a true-up or reconciliation process to adjust these charges to reflect the actual effort expended on the grant projects. The absence of a reconciliation process between budgeted and actual time spent on grant activities may have resulted in inaccurate charges to federal awards. This could potentially lead to questioned costs and impact the allowability of payroll expenses charged to the grants. The County’s policies and procedures did not include a process for reconciling budgeted payroll allocations to actual time spent on grant activities. Additionally, there was a lack of understanding among some department personnel regarding the requirement to base final charges on actual effort rather than budget estimates. As provided in 2 CFR §200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Payroll distribution records must reasonably reflect an employee’s total activity and support the allocation of salary or wages across specific activities. The County should strengthen its comprehensive internal control policies and procedures to ensure that payroll costs charged to federal awards are accurate, allowable, and properly supported. Additionally, the County should implement a process to reconcile the budgeted payroll allocations with actual time spent on grant activities. The County's corrective action plan at the end of this report includes the views and planned actions of its responsible officials. We are not required to audit and have not audited these responses or corrective actions and therefore we provide no assurances as to their accuracy.
Finding Number: 2024-001 Significant Deficiency – Internal Controls over Compliance and Compliance of: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Award: Aging Cluster, No. 93.045, Special Programs for the Aging, Title III, Part C, Nutrition Services, and No 93.053, Nutrition Services Incentive Program Federal Agency: Department of Health and Human Services Pass-Through Entity: Monterey County Area Agency on Aging Criteria or Specific Requirement: CFR section 200.403, Factors Affecting Allowability of Costs, states costs must: conform to limitations or exclusions, be accorded consistent treatment, a cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost and be adequately documented. 2 CFR section 200.405, Allowable Costs, states this standard is met if the cost is incurred specifically for the Federal award and can be distributed in proportions that may be approximated using reasonable methods. Further, if costs benefit two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined, the costs must be allocated on any reasonable documented basis. 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, states charges to Federal awards for salaries must be based on records that accurately reflect the work performed and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award and non-Federal award and charges for the salaries and wages of nonexempt employees must be supported by records indicating the total number of hours worked each day. Condition: The Organization did not maintain an effective control environment to ensure costs incurred for expenditures charged to the program were in accordance with contract requirements and applicable cost principles. The method for allocation of non-payroll expenditures between federally funded programs and other programs was based on percentages that had not been updated to reflect current funding sources. Payroll expenditures were allocated based on budget estimates and not upon the actual work performed on various Federal awards and non-federal activities. Cause: The Organization received new funding subject to Uniform Guidance and did not have written internal control policies as required by Uniform Guidance. Processes and procedures were not updated to be in accordance with Uniform Guidance. Effect or Potential Effect: Potential for unallowable activities and unallowable costs. Questioned Costs: Related questioned costs are unknown. Context: During the year under audit, the issues represent a systemic problem. Recommendation: We recommend the Organization document all methods used to allocate expenditures and ensure adequate support is maintained to substantiate allocation calculations. Management should design and implement policies and procedures to ensure payroll expenditures are based on actual time spent on the federal funded programs. View of Responsible Officials: In response to finding number 2024-001, there is no disagreement with the audit finding. As this was a known finding at the beginning of the audit, management has drafted new policies and procedures to ensure payroll expenditures are based on actual time spent of the federal funded programs. Managers will allocate employees’ time based on tasks performed and the amount of time worked on federal award activities. The allocation of non-payroll expenses will be based on percentages of current funding sources. These new policies and procedures will be in full effect throughout fiscal year 2025 and beyond.
Finding Number: 2024-001 Significant Deficiency – Internal Controls over Compliance and Compliance of: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Award: Aging Cluster, No. 93.045, Special Programs for the Aging, Title III, Part C, Nutrition Services, and No 93.053, Nutrition Services Incentive Program Federal Agency: Department of Health and Human Services Pass-Through Entity: Monterey County Area Agency on Aging Criteria or Specific Requirement: CFR section 200.403, Factors Affecting Allowability of Costs, states costs must: conform to limitations or exclusions, be accorded consistent treatment, a cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost and be adequately documented. 2 CFR section 200.405, Allowable Costs, states this standard is met if the cost is incurred specifically for the Federal award and can be distributed in proportions that may be approximated using reasonable methods. Further, if costs benefit two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined, the costs must be allocated on any reasonable documented basis. 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, states charges to Federal awards for salaries must be based on records that accurately reflect the work performed and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award and non-Federal award and charges for the salaries and wages of nonexempt employees must be supported by records indicating the total number of hours worked each day. Condition: The Organization did not maintain an effective control environment to ensure costs incurred for expenditures charged to the program were in accordance with contract requirements and applicable cost principles. The method for allocation of non-payroll expenditures between federally funded programs and other programs was based on percentages that had not been updated to reflect current funding sources. Payroll expenditures were allocated based on budget estimates and not upon the actual work performed on various Federal awards and non-federal activities. Cause: The Organization received new funding subject to Uniform Guidance and did not have written internal control policies as required by Uniform Guidance. Processes and procedures were not updated to be in accordance with Uniform Guidance. Effect or Potential Effect: Potential for unallowable activities and unallowable costs. Questioned Costs: Related questioned costs are unknown. Context: During the year under audit, the issues represent a systemic problem. Recommendation: We recommend the Organization document all methods used to allocate expenditures and ensure adequate support is maintained to substantiate allocation calculations. Management should design and implement policies and procedures to ensure payroll expenditures are based on actual time spent on the federal funded programs. View of Responsible Officials: In response to finding number 2024-001, there is no disagreement with the audit finding. As this was a known finding at the beginning of the audit, management has drafted new policies and procedures to ensure payroll expenditures are based on actual time spent of the federal funded programs. Managers will allocate employees’ time based on tasks performed and the amount of time worked on federal award activities. The allocation of non-payroll expenses will be based on percentages of current funding sources. These new policies and procedures will be in full effect throughout fiscal year 2025 and beyond.
Finding Number: 2024-001 Significant Deficiency – Internal Controls over Compliance and Compliance of: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Award: Aging Cluster, No. 93.045, Special Programs for the Aging, Title III, Part C, Nutrition Services, and No 93.053, Nutrition Services Incentive Program Federal Agency: Department of Health and Human Services Pass-Through Entity: Monterey County Area Agency on Aging Criteria or Specific Requirement: CFR section 200.403, Factors Affecting Allowability of Costs, states costs must: conform to limitations or exclusions, be accorded consistent treatment, a cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost and be adequately documented. 2 CFR section 200.405, Allowable Costs, states this standard is met if the cost is incurred specifically for the Federal award and can be distributed in proportions that may be approximated using reasonable methods. Further, if costs benefit two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined, the costs must be allocated on any reasonable documented basis. 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, states charges to Federal awards for salaries must be based on records that accurately reflect the work performed and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award and non-Federal award and charges for the salaries and wages of nonexempt employees must be supported by records indicating the total number of hours worked each day. Condition: The Organization did not maintain an effective control environment to ensure costs incurred for expenditures charged to the program were in accordance with contract requirements and applicable cost principles. The method for allocation of non-payroll expenditures between federally funded programs and other programs was based on percentages that had not been updated to reflect current funding sources. Payroll expenditures were allocated based on budget estimates and not upon the actual work performed on various Federal awards and non-federal activities. Cause: The Organization received new funding subject to Uniform Guidance and did not have written internal control policies as required by Uniform Guidance. Processes and procedures were not updated to be in accordance with Uniform Guidance. Effect or Potential Effect: Potential for unallowable activities and unallowable costs. Questioned Costs: Related questioned costs are unknown. Context: During the year under audit, the issues represent a systemic problem. Recommendation: We recommend the Organization document all methods used to allocate expenditures and ensure adequate support is maintained to substantiate allocation calculations. Management should design and implement policies and procedures to ensure payroll expenditures are based on actual time spent on the federal funded programs. View of Responsible Officials: In response to finding number 2024-001, there is no disagreement with the audit finding. As this was a known finding at the beginning of the audit, management has drafted new policies and procedures to ensure payroll expenditures are based on actual time spent of the federal funded programs. Managers will allocate employees’ time based on tasks performed and the amount of time worked on federal award activities. The allocation of non-payroll expenses will be based on percentages of current funding sources. These new policies and procedures will be in full effect throughout fiscal year 2025 and beyond.
Finding Number: 2024-001 Significant Deficiency – Internal Controls over Compliance and Compliance of: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Award: Aging Cluster, No. 93.045, Special Programs for the Aging, Title III, Part C, Nutrition Services, and No 93.053, Nutrition Services Incentive Program Federal Agency: Department of Health and Human Services Pass-Through Entity: Monterey County Area Agency on Aging Criteria or Specific Requirement: CFR section 200.403, Factors Affecting Allowability of Costs, states costs must: conform to limitations or exclusions, be accorded consistent treatment, a cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost and be adequately documented. 2 CFR section 200.405, Allowable Costs, states this standard is met if the cost is incurred specifically for the Federal award and can be distributed in proportions that may be approximated using reasonable methods. Further, if costs benefit two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined, the costs must be allocated on any reasonable documented basis. 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, states charges to Federal awards for salaries must be based on records that accurately reflect the work performed and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award and non-Federal award and charges for the salaries and wages of nonexempt employees must be supported by records indicating the total number of hours worked each day. Condition: The Organization did not maintain an effective control environment to ensure costs incurred for expenditures charged to the program were in accordance with contract requirements and applicable cost principles. The method for allocation of non-payroll expenditures between federally funded programs and other programs was based on percentages that had not been updated to reflect current funding sources. Payroll expenditures were allocated based on budget estimates and not upon the actual work performed on various Federal awards and non-federal activities. Cause: The Organization received new funding subject to Uniform Guidance and did not have written internal control policies as required by Uniform Guidance. Processes and procedures were not updated to be in accordance with Uniform Guidance. Effect or Potential Effect: Potential for unallowable activities and unallowable costs. Questioned Costs: Related questioned costs are unknown. Context: During the year under audit, the issues represent a systemic problem. Recommendation: We recommend the Organization document all methods used to allocate expenditures and ensure adequate support is maintained to substantiate allocation calculations. Management should design and implement policies and procedures to ensure payroll expenditures are based on actual time spent on the federal funded programs. View of Responsible Officials: In response to finding number 2024-001, there is no disagreement with the audit finding. As this was a known finding at the beginning of the audit, management has drafted new policies and procedures to ensure payroll expenditures are based on actual time spent of the federal funded programs. Managers will allocate employees’ time based on tasks performed and the amount of time worked on federal award activities. The allocation of non-payroll expenses will be based on percentages of current funding sources. These new policies and procedures will be in full effect throughout fiscal year 2025 and beyond.
Finding Number: 2024-001 Significant Deficiency – Internal Controls over Compliance and Compliance of: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Award: Aging Cluster, No. 93.045, Special Programs for the Aging, Title III, Part C, Nutrition Services, and No 93.053, Nutrition Services Incentive Program Federal Agency: Department of Health and Human Services Pass-Through Entity: Monterey County Area Agency on Aging Criteria or Specific Requirement: CFR section 200.403, Factors Affecting Allowability of Costs, states costs must: conform to limitations or exclusions, be accorded consistent treatment, a cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost and be adequately documented. 2 CFR section 200.405, Allowable Costs, states this standard is met if the cost is incurred specifically for the Federal award and can be distributed in proportions that may be approximated using reasonable methods. Further, if costs benefit two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined, the costs must be allocated on any reasonable documented basis. 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, states charges to Federal awards for salaries must be based on records that accurately reflect the work performed and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award and non-Federal award and charges for the salaries and wages of nonexempt employees must be supported by records indicating the total number of hours worked each day. Condition: The Organization did not maintain an effective control environment to ensure costs incurred for expenditures charged to the program were in accordance with contract requirements and applicable cost principles. The method for allocation of non-payroll expenditures between federally funded programs and other programs was based on percentages that had not been updated to reflect current funding sources. Payroll expenditures were allocated based on budget estimates and not upon the actual work performed on various Federal awards and non-federal activities. Cause: The Organization received new funding subject to Uniform Guidance and did not have written internal control policies as required by Uniform Guidance. Processes and procedures were not updated to be in accordance with Uniform Guidance. Effect or Potential Effect: Potential for unallowable activities and unallowable costs. Questioned Costs: Related questioned costs are unknown. Context: During the year under audit, the issues represent a systemic problem. Recommendation: We recommend the Organization document all methods used to allocate expenditures and ensure adequate support is maintained to substantiate allocation calculations. Management should design and implement policies and procedures to ensure payroll expenditures are based on actual time spent on the federal funded programs. View of Responsible Officials: In response to finding number 2024-001, there is no disagreement with the audit finding. As this was a known finding at the beginning of the audit, management has drafted new policies and procedures to ensure payroll expenditures are based on actual time spent of the federal funded programs. Managers will allocate employees’ time based on tasks performed and the amount of time worked on federal award activities. The allocation of non-payroll expenses will be based on percentages of current funding sources. These new policies and procedures will be in full effect throughout fiscal year 2025 and beyond.
Finding Number: 2024-001 Significant Deficiency – Internal Controls over Compliance and Compliance of: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Award: Aging Cluster, No. 93.045, Special Programs for the Aging, Title III, Part C, Nutrition Services, and No 93.053, Nutrition Services Incentive Program Federal Agency: Department of Health and Human Services Pass-Through Entity: Monterey County Area Agency on Aging Criteria or Specific Requirement: CFR section 200.403, Factors Affecting Allowability of Costs, states costs must: conform to limitations or exclusions, be accorded consistent treatment, a cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost and be adequately documented. 2 CFR section 200.405, Allowable Costs, states this standard is met if the cost is incurred specifically for the Federal award and can be distributed in proportions that may be approximated using reasonable methods. Further, if costs benefit two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined, the costs must be allocated on any reasonable documented basis. 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, states charges to Federal awards for salaries must be based on records that accurately reflect the work performed and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award and non-Federal award and charges for the salaries and wages of nonexempt employees must be supported by records indicating the total number of hours worked each day. Condition: The Organization did not maintain an effective control environment to ensure costs incurred for expenditures charged to the program were in accordance with contract requirements and applicable cost principles. The method for allocation of non-payroll expenditures between federally funded programs and other programs was based on percentages that had not been updated to reflect current funding sources. Payroll expenditures were allocated based on budget estimates and not upon the actual work performed on various Federal awards and non-federal activities. Cause: The Organization received new funding subject to Uniform Guidance and did not have written internal control policies as required by Uniform Guidance. Processes and procedures were not updated to be in accordance with Uniform Guidance. Effect or Potential Effect: Potential for unallowable activities and unallowable costs. Questioned Costs: Related questioned costs are unknown. Context: During the year under audit, the issues represent a systemic problem. Recommendation: We recommend the Organization document all methods used to allocate expenditures and ensure adequate support is maintained to substantiate allocation calculations. Management should design and implement policies and procedures to ensure payroll expenditures are based on actual time spent on the federal funded programs. View of Responsible Officials: In response to finding number 2024-001, there is no disagreement with the audit finding. As this was a known finding at the beginning of the audit, management has drafted new policies and procedures to ensure payroll expenditures are based on actual time spent of the federal funded programs. Managers will allocate employees’ time based on tasks performed and the amount of time worked on federal award activities. The allocation of non-payroll expenses will be based on percentages of current funding sources. These new policies and procedures will be in full effect throughout fiscal year 2025 and beyond.
(2024-041) Title: Internal control over monitoring of employee classification and compensation needs improvement Prior Year Findings: See schedule of Findings and Questioned costs for chart/table State Department: Administrative and Financial Services State Bureau: Human Resources Federal Agency: U.S. Department of the Interior U.S. Department of Labor U.S. Department of Education U.S. Department of Health and Human Services Assistance Listing Title: Fish and Wildlife Cluster Unemployment Insurance (UI) (COVID-19) Special Education Cluster (IDEA) (COVID-19) Rehabilitation Services – Vocational Rehabilitation Grants to States CCDF Cluster (COVID-19) Assistance Listing Number: 15.605, 15.611, 15.626; 17.225; 84.027, 84.173; 84.126; 93.489, 93.575, 93.596 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Allowable costs/cost principles Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.430; 5 MRSA 7061 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs of compensation are allowable to the extent that personal services are rendered during the period of performance under the Federal award, total compensation is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity, and follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies. 5 MRSA 7061 states that the (Bureau of Human Resources (BHR)) director shall record the duties and responsibilities of all positions in State service and establish classes for these positions. The procedure shall provide for periodic updating of job descriptions at least every five years to accurately reflect current duties and responsibilities of each job classification. Condition: BHR maintains the job classification specifications and related compensation plan of State employees. A specific salary specification and grade is assigned based on the duties and responsibilities referenced in the job classification specification; this represents reasonable compensation for the services rendered for all positions that inhabit a given job classification specification. The assigned salary grade provides a basis for the allowability of compensation costs charged to Federal awards by documenting the reasonableness of compensation for services rendered by State employees, and that the position appointments under the job classification specification were made and maintained in accordance with State statute. While BHR relies on data collected from State agencies to implement procedures regarding the classification plan, BHR retains ultimate oversight responsibility. BHR is the only agency with the authority to modify the classification plan. According to 5 MRSA 7061, BHR must provide for periodic updating of job descriptions at least every five years to accurately reflect current duties and responsibilities of each job classification. The Office of the State Auditor (OSA) tested 19 job classification specifications for compliance with 5 MRSA 7061. BHR could not provide documentation for 14 of the 19 job classification specifications tested to support that they were updated within five years as required by 5 MRSA 7061. Additionally, BHR’s current tracking mechanism does not effectively identify the dates of the last review and next scheduled review, thus hindering compliance with the statutory five-year cycle. OSA selected a non-statistical random sample. Context: • During fiscal year 2024, approximately $139 million in payroll expenditures were charged to Federal grants. This represents approximately ten percent of fiscal year 2024 Statewide payroll expenditures, which totaled $1.3 billion. • BHR was responsible for managing approximately 1,200 job classification specifications in fiscal year 2024. Cause: • Lack of resources • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: State employee job classification and compensation may not accurately reflect the current duties and responsibilities of each position. Without documented evidence that review activities are occurring, BHR cannot ensure that the decisions involving the classification and compensation plan of all State employee positions are properly supported by documentation that accurately reflects the current duties and responsibilities of each position. As a result, this may lead to noncompliance with Federal and State regulations. Recommendation: We recommend that the Department: • enhance oversight regarding the maintenance of the State classification and compensation plan in accordance with State statute; • implement policies and procedures to ensure updates or reviews of the State classification and compensation plan at the job classification specification level are adequately documented; and • implement a tracking mechanism to accurately monitor the dates of past reviews and schedule forthcoming reviews to aid in adherence to the statutory requirement. Corrective Action Plan: See F-19 Management’s Response: The Department disagrees with this finding. The procedure referenced in 5 M.R.S. Sec. 7061(4) is laid out in 18-389 C.M.R. Ch. 4. The Department complies with these written policies and procedures as required by federal and state law. Section 7061(4) was last updated in 2023, with an effective date in October 2023. Pursuant to the JSC on Appropriations, Section 7061(4)(A) requires a review every five years of the state compensation plan for each class or position in the classified service. The FJA process is not related to the compensation plan, however, it is administered under a separate internal control structure that is in place and operating effectively and ensures that the compensation for individual employees is reasonable for the services rendered. The requirement for review of each classification through the FJA process is covered under Section 7061(4)(C) and is required to be reviewed every 10 years. It is also important to note that the Department has conferred with the OAG, who determined that Section 7061(4)(C) is not retroactive, meaning the Department has another 8.5 years to complete a review of all classifications. Additionally, salary studies conducted on State employee wages have shown that the salary and wages of job classifications paid by the State are consistently lower than industry averages, removing the risk that the utilization of these salary schedules as a component of payroll costs will cause overcharges to Federal grants. Contact: Michael J. Dunn, Acting State Human Resources Officer, Bureau of Human Resources, DAFS, 207-287-4651 Auditor’s Concluding Remarks: OSA acknowledges BHR’s reference to 5 MRSA 7061(4), as amended in October 2023, and the procedures for the classification maintenance outlined in 18-389 C.M.R. Ch. 4. We also recognize the distinction BHR draws between the five-year statutory requirement under 5 MRSA 7061(4)(A) for updating job descriptions and compensation plan components, and the ten-year classification plan review introduced under 5 MRSA 7061(4)(C). OSA’s review focused on BHR’s compliance with the five-year update requirement under 5 MRSA 7061(4)(A). While the statute was amended in 2023, the requirement that job descriptions be updated at least every five years has been in place since 1987. The recent amendment did not create this requirement; it expanded BHR’s obligation by tying the update process to the compensation plan and introducing a separate ten-year comprehensive classification review under 5 MRSA 7061(4)(C). These changes reflect an intent to strengthen oversight and modernize the State’s personnel system, not to delay or diminish BHR’s statutory responsibilities. To distinguish between BHR’s statutory responsibilities under 5 MRSA 7061(4)(A) and 5 MRSA 7061(4)(C), subsection (4)(A) requires periodic updating of job descriptions and the compensation plan at least every five years; this ensures that individual job classification specifications remain current and accurately reflect the duties and responsibilities of State positions. In contrast, subsection (4)(C), introduced in 2023, requires a broader, ten-year comprehensive review of the classification plan as a whole. The two requirements serve different purposes and operate on separate cycles. The five-year review of individual classifications under subsection (4)(A) remains an ongoing statutory obligation, regardless of the addition of subsection (4)(C). While BHR references its internal procedures under 18-389 C.M.R. Ch. 4 as evidence of compliance, those procedures do not incorporate or reflect the statutory five-year update requirement in subsection (4)(A) or the ten-year update in subsection (4)(C). Furthermore, BHR could not provide documentation to support that 14 of the 19 job classifications tested by OSA had been reviewed or updated within the required timeframe. BHR does not have a comprehensive system to track classification review dates across the classification plan, making it difficult to demonstrate compliance with the statute or proactively manage updates. Internal policy may guide operations, but compliance is ultimately measured against the statutory requirements that govern those operations. The issues identified in audit testing also have implications for the compensation system. Under 5 MRSA 7065, the State’s compensation plan is developed based on the classification plan, with salary grades assigned to specific job classes according to documented duties and responsibilities. The classification plan is the foundational structure upon which compensation decisions are made. If job descriptions are outdated, or not periodically reviewed as required, positions may be misaligned with inappropriate salary grades, which may lead to pay that does not accurately reflect the nature or complexity of the work, including Federally-funded positions. Without a properly maintained classification system, the State cannot ensure that compensation, whether paid with State or Federal funds, is supported by a valid and compliant classification system. Under 2 CFR 200.430(a)(2), compensation for personal services is allowable under Federal awards only when it follows “an appointment made in accordance with the recipient’s…laws, rules, or written policies.” This Federal regulation places the burden of compliance on the State’s adherence to its own legal framework. The Federal government allows flexibility, but that flexibility hinges on the condition that the State follows its own laws; it is the minimum threshold for allowability requirements over personnel costs. Compliance with this law is not discretionary; it is a legal obligation and direct reflection of the expectations placed on the State by the Legislature and the Federal government. BHR asserts that State employee compensation is consistently below market rates and therefore poses no risk of overcharging Federal programs. Even if BHR’s current assertion that State salaries are below market is accepted, Federal guidance provides that reasonableness in amount is only one factor in determining allowability. Compensation must also follow lawful appointment processes and reflect compliance with State personnel laws. A claim of underpayment is not a compensating control to prevent noncompliance with required classification updates. The following statutes only serve to emphasize the responsibility placed upon BHR and the State Human Resources Officer. Under 5 MRSA 7036, the State Human Resources Officer is explicitly responsible for adopting rules for both classification and compensation plans (7036(I) and (J)), enforcing the Civil Service Law (7036(21)), and conducting both short-term and long-term planning for the State’s personnel system (7036(10)). The Officer is also responsible for responding to reclassification requests (7036(5)) and working closely with agencies on their personnel needs (7036(7)). These statutory responsibilities further confirm that maintaining accurate, up-to-date classification specifications is not discretionary. Moreover, failure to fulfill these legal duties has implications that underscore the purpose of a centralized human resources function. These conditions present a risk to the accessibility to public service employment, including potential delayed hiring decisions and diminished ability to attract and retain a skilled workforce. When classification structures are outdated and statutory mandates are not followed, BHR cannot deliver on its mission. We acknowledge BHR’s consultation with the Office of the Attorney General and its efforts to clarify its interpretation of the law; however, the condition observed during the audit period reflects a neutralization of internal controls and subsequent risk of noncompliance with statutory requirements that directly affect both classification and the allowability of personnel costs under Federal awards. The finding remains as stated. (State Number: 24-0111-01)
(2024-041) Title: Internal control over monitoring of employee classification and compensation needs improvement Prior Year Findings: See schedule of Findings and Questioned costs for chart/table State Department: Administrative and Financial Services State Bureau: Human Resources Federal Agency: U.S. Department of the Interior U.S. Department of Labor U.S. Department of Education U.S. Department of Health and Human Services Assistance Listing Title: Fish and Wildlife Cluster Unemployment Insurance (UI) (COVID-19) Special Education Cluster (IDEA) (COVID-19) Rehabilitation Services – Vocational Rehabilitation Grants to States CCDF Cluster (COVID-19) Assistance Listing Number: 15.605, 15.611, 15.626; 17.225; 84.027, 84.173; 84.126; 93.489, 93.575, 93.596 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Allowable costs/cost principles Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.430; 5 MRSA 7061 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs of compensation are allowable to the extent that personal services are rendered during the period of performance under the Federal award, total compensation is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity, and follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies. 5 MRSA 7061 states that the (Bureau of Human Resources (BHR)) director shall record the duties and responsibilities of all positions in State service and establish classes for these positions. The procedure shall provide for periodic updating of job descriptions at least every five years to accurately reflect current duties and responsibilities of each job classification. Condition: BHR maintains the job classification specifications and related compensation plan of State employees. A specific salary specification and grade is assigned based on the duties and responsibilities referenced in the job classification specification; this represents reasonable compensation for the services rendered for all positions that inhabit a given job classification specification. The assigned salary grade provides a basis for the allowability of compensation costs charged to Federal awards by documenting the reasonableness of compensation for services rendered by State employees, and that the position appointments under the job classification specification were made and maintained in accordance with State statute. While BHR relies on data collected from State agencies to implement procedures regarding the classification plan, BHR retains ultimate oversight responsibility. BHR is the only agency with the authority to modify the classification plan. According to 5 MRSA 7061, BHR must provide for periodic updating of job descriptions at least every five years to accurately reflect current duties and responsibilities of each job classification. The Office of the State Auditor (OSA) tested 19 job classification specifications for compliance with 5 MRSA 7061. BHR could not provide documentation for 14 of the 19 job classification specifications tested to support that they were updated within five years as required by 5 MRSA 7061. Additionally, BHR’s current tracking mechanism does not effectively identify the dates of the last review and next scheduled review, thus hindering compliance with the statutory five-year cycle. OSA selected a non-statistical random sample. Context: • During fiscal year 2024, approximately $139 million in payroll expenditures were charged to Federal grants. This represents approximately ten percent of fiscal year 2024 Statewide payroll expenditures, which totaled $1.3 billion. • BHR was responsible for managing approximately 1,200 job classification specifications in fiscal year 2024. Cause: • Lack of resources • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: State employee job classification and compensation may not accurately reflect the current duties and responsibilities of each position. Without documented evidence that review activities are occurring, BHR cannot ensure that the decisions involving the classification and compensation plan of all State employee positions are properly supported by documentation that accurately reflects the current duties and responsibilities of each position. As a result, this may lead to noncompliance with Federal and State regulations. Recommendation: We recommend that the Department: • enhance oversight regarding the maintenance of the State classification and compensation plan in accordance with State statute; • implement policies and procedures to ensure updates or reviews of the State classification and compensation plan at the job classification specification level are adequately documented; and • implement a tracking mechanism to accurately monitor the dates of past reviews and schedule forthcoming reviews to aid in adherence to the statutory requirement. Corrective Action Plan: See F-19 Management’s Response: The Department disagrees with this finding. The procedure referenced in 5 M.R.S. Sec. 7061(4) is laid out in 18-389 C.M.R. Ch. 4. The Department complies with these written policies and procedures as required by federal and state law. Section 7061(4) was last updated in 2023, with an effective date in October 2023. Pursuant to the JSC on Appropriations, Section 7061(4)(A) requires a review every five years of the state compensation plan for each class or position in the classified service. The FJA process is not related to the compensation plan, however, it is administered under a separate internal control structure that is in place and operating effectively and ensures that the compensation for individual employees is reasonable for the services rendered. The requirement for review of each classification through the FJA process is covered under Section 7061(4)(C) and is required to be reviewed every 10 years. It is also important to note that the Department has conferred with the OAG, who determined that Section 7061(4)(C) is not retroactive, meaning the Department has another 8.5 years to complete a review of all classifications. Additionally, salary studies conducted on State employee wages have shown that the salary and wages of job classifications paid by the State are consistently lower than industry averages, removing the risk that the utilization of these salary schedules as a component of payroll costs will cause overcharges to Federal grants. Contact: Michael J. Dunn, Acting State Human Resources Officer, Bureau of Human Resources, DAFS, 207-287-4651 Auditor’s Concluding Remarks: OSA acknowledges BHR’s reference to 5 MRSA 7061(4), as amended in October 2023, and the procedures for the classification maintenance outlined in 18-389 C.M.R. Ch. 4. We also recognize the distinction BHR draws between the five-year statutory requirement under 5 MRSA 7061(4)(A) for updating job descriptions and compensation plan components, and the ten-year classification plan review introduced under 5 MRSA 7061(4)(C). OSA’s review focused on BHR’s compliance with the five-year update requirement under 5 MRSA 7061(4)(A). While the statute was amended in 2023, the requirement that job descriptions be updated at least every five years has been in place since 1987. The recent amendment did not create this requirement; it expanded BHR’s obligation by tying the update process to the compensation plan and introducing a separate ten-year comprehensive classification review under 5 MRSA 7061(4)(C). These changes reflect an intent to strengthen oversight and modernize the State’s personnel system, not to delay or diminish BHR’s statutory responsibilities. To distinguish between BHR’s statutory responsibilities under 5 MRSA 7061(4)(A) and 5 MRSA 7061(4)(C), subsection (4)(A) requires periodic updating of job descriptions and the compensation plan at least every five years; this ensures that individual job classification specifications remain current and accurately reflect the duties and responsibilities of State positions. In contrast, subsection (4)(C), introduced in 2023, requires a broader, ten-year comprehensive review of the classification plan as a whole. The two requirements serve different purposes and operate on separate cycles. The five-year review of individual classifications under subsection (4)(A) remains an ongoing statutory obligation, regardless of the addition of subsection (4)(C). While BHR references its internal procedures under 18-389 C.M.R. Ch. 4 as evidence of compliance, those procedures do not incorporate or reflect the statutory five-year update requirement in subsection (4)(A) or the ten-year update in subsection (4)(C). Furthermore, BHR could not provide documentation to support that 14 of the 19 job classifications tested by OSA had been reviewed or updated within the required timeframe. BHR does not have a comprehensive system to track classification review dates across the classification plan, making it difficult to demonstrate compliance with the statute or proactively manage updates. Internal policy may guide operations, but compliance is ultimately measured against the statutory requirements that govern those operations. The issues identified in audit testing also have implications for the compensation system. Under 5 MRSA 7065, the State’s compensation plan is developed based on the classification plan, with salary grades assigned to specific job classes according to documented duties and responsibilities. The classification plan is the foundational structure upon which compensation decisions are made. If job descriptions are outdated, or not periodically reviewed as required, positions may be misaligned with inappropriate salary grades, which may lead to pay that does not accurately reflect the nature or complexity of the work, including Federally-funded positions. Without a properly maintained classification system, the State cannot ensure that compensation, whether paid with State or Federal funds, is supported by a valid and compliant classification system. Under 2 CFR 200.430(a)(2), compensation for personal services is allowable under Federal awards only when it follows “an appointment made in accordance with the recipient’s…laws, rules, or written policies.” This Federal regulation places the burden of compliance on the State’s adherence to its own legal framework. The Federal government allows flexibility, but that flexibility hinges on the condition that the State follows its own laws; it is the minimum threshold for allowability requirements over personnel costs. Compliance with this law is not discretionary; it is a legal obligation and direct reflection of the expectations placed on the State by the Legislature and the Federal government. BHR asserts that State employee compensation is consistently below market rates and therefore poses no risk of overcharging Federal programs. Even if BHR’s current assertion that State salaries are below market is accepted, Federal guidance provides that reasonableness in amount is only one factor in determining allowability. Compensation must also follow lawful appointment processes and reflect compliance with State personnel laws. A claim of underpayment is not a compensating control to prevent noncompliance with required classification updates. The following statutes only serve to emphasize the responsibility placed upon BHR and the State Human Resources Officer. Under 5 MRSA 7036, the State Human Resources Officer is explicitly responsible for adopting rules for both classification and compensation plans (7036(I) and (J)), enforcing the Civil Service Law (7036(21)), and conducting both short-term and long-term planning for the State’s personnel system (7036(10)). The Officer is also responsible for responding to reclassification requests (7036(5)) and working closely with agencies on their personnel needs (7036(7)). These statutory responsibilities further confirm that maintaining accurate, up-to-date classification specifications is not discretionary. Moreover, failure to fulfill these legal duties has implications that underscore the purpose of a centralized human resources function. These conditions present a risk to the accessibility to public service employment, including potential delayed hiring decisions and diminished ability to attract and retain a skilled workforce. When classification structures are outdated and statutory mandates are not followed, BHR cannot deliver on its mission. We acknowledge BHR’s consultation with the Office of the Attorney General and its efforts to clarify its interpretation of the law; however, the condition observed during the audit period reflects a neutralization of internal controls and subsequent risk of noncompliance with statutory requirements that directly affect both classification and the allowability of personnel costs under Federal awards. The finding remains as stated. (State Number: 24-0111-01)
(2024-041) Title: Internal control over monitoring of employee classification and compensation needs improvement Prior Year Findings: See schedule of Findings and Questioned costs for chart/table State Department: Administrative and Financial Services State Bureau: Human Resources Federal Agency: U.S. Department of the Interior U.S. Department of Labor U.S. Department of Education U.S. Department of Health and Human Services Assistance Listing Title: Fish and Wildlife Cluster Unemployment Insurance (UI) (COVID-19) Special Education Cluster (IDEA) (COVID-19) Rehabilitation Services – Vocational Rehabilitation Grants to States CCDF Cluster (COVID-19) Assistance Listing Number: 15.605, 15.611, 15.626; 17.225; 84.027, 84.173; 84.126; 93.489, 93.575, 93.596 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Allowable costs/cost principles Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.430; 5 MRSA 7061 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs of compensation are allowable to the extent that personal services are rendered during the period of performance under the Federal award, total compensation is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity, and follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies. 5 MRSA 7061 states that the (Bureau of Human Resources (BHR)) director shall record the duties and responsibilities of all positions in State service and establish classes for these positions. The procedure shall provide for periodic updating of job descriptions at least every five years to accurately reflect current duties and responsibilities of each job classification. Condition: BHR maintains the job classification specifications and related compensation plan of State employees. A specific salary specification and grade is assigned based on the duties and responsibilities referenced in the job classification specification; this represents reasonable compensation for the services rendered for all positions that inhabit a given job classification specification. The assigned salary grade provides a basis for the allowability of compensation costs charged to Federal awards by documenting the reasonableness of compensation for services rendered by State employees, and that the position appointments under the job classification specification were made and maintained in accordance with State statute. While BHR relies on data collected from State agencies to implement procedures regarding the classification plan, BHR retains ultimate oversight responsibility. BHR is the only agency with the authority to modify the classification plan. According to 5 MRSA 7061, BHR must provide for periodic updating of job descriptions at least every five years to accurately reflect current duties and responsibilities of each job classification. The Office of the State Auditor (OSA) tested 19 job classification specifications for compliance with 5 MRSA 7061. BHR could not provide documentation for 14 of the 19 job classification specifications tested to support that they were updated within five years as required by 5 MRSA 7061. Additionally, BHR’s current tracking mechanism does not effectively identify the dates of the last review and next scheduled review, thus hindering compliance with the statutory five-year cycle. OSA selected a non-statistical random sample. Context: • During fiscal year 2024, approximately $139 million in payroll expenditures were charged to Federal grants. This represents approximately ten percent of fiscal year 2024 Statewide payroll expenditures, which totaled $1.3 billion. • BHR was responsible for managing approximately 1,200 job classification specifications in fiscal year 2024. Cause: • Lack of resources • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: State employee job classification and compensation may not accurately reflect the current duties and responsibilities of each position. Without documented evidence that review activities are occurring, BHR cannot ensure that the decisions involving the classification and compensation plan of all State employee positions are properly supported by documentation that accurately reflects the current duties and responsibilities of each position. As a result, this may lead to noncompliance with Federal and State regulations. Recommendation: We recommend that the Department: • enhance oversight regarding the maintenance of the State classification and compensation plan in accordance with State statute; • implement policies and procedures to ensure updates or reviews of the State classification and compensation plan at the job classification specification level are adequately documented; and • implement a tracking mechanism to accurately monitor the dates of past reviews and schedule forthcoming reviews to aid in adherence to the statutory requirement. Corrective Action Plan: See F-19 Management’s Response: The Department disagrees with this finding. The procedure referenced in 5 M.R.S. Sec. 7061(4) is laid out in 18-389 C.M.R. Ch. 4. The Department complies with these written policies and procedures as required by federal and state law. Section 7061(4) was last updated in 2023, with an effective date in October 2023. Pursuant to the JSC on Appropriations, Section 7061(4)(A) requires a review every five years of the state compensation plan for each class or position in the classified service. The FJA process is not related to the compensation plan, however, it is administered under a separate internal control structure that is in place and operating effectively and ensures that the compensation for individual employees is reasonable for the services rendered. The requirement for review of each classification through the FJA process is covered under Section 7061(4)(C) and is required to be reviewed every 10 years. It is also important to note that the Department has conferred with the OAG, who determined that Section 7061(4)(C) is not retroactive, meaning the Department has another 8.5 years to complete a review of all classifications. Additionally, salary studies conducted on State employee wages have shown that the salary and wages of job classifications paid by the State are consistently lower than industry averages, removing the risk that the utilization of these salary schedules as a component of payroll costs will cause overcharges to Federal grants. Contact: Michael J. Dunn, Acting State Human Resources Officer, Bureau of Human Resources, DAFS, 207-287-4651 Auditor’s Concluding Remarks: OSA acknowledges BHR’s reference to 5 MRSA 7061(4), as amended in October 2023, and the procedures for the classification maintenance outlined in 18-389 C.M.R. Ch. 4. We also recognize the distinction BHR draws between the five-year statutory requirement under 5 MRSA 7061(4)(A) for updating job descriptions and compensation plan components, and the ten-year classification plan review introduced under 5 MRSA 7061(4)(C). OSA’s review focused on BHR’s compliance with the five-year update requirement under 5 MRSA 7061(4)(A). While the statute was amended in 2023, the requirement that job descriptions be updated at least every five years has been in place since 1987. The recent amendment did not create this requirement; it expanded BHR’s obligation by tying the update process to the compensation plan and introducing a separate ten-year comprehensive classification review under 5 MRSA 7061(4)(C). These changes reflect an intent to strengthen oversight and modernize the State’s personnel system, not to delay or diminish BHR’s statutory responsibilities. To distinguish between BHR’s statutory responsibilities under 5 MRSA 7061(4)(A) and 5 MRSA 7061(4)(C), subsection (4)(A) requires periodic updating of job descriptions and the compensation plan at least every five years; this ensures that individual job classification specifications remain current and accurately reflect the duties and responsibilities of State positions. In contrast, subsection (4)(C), introduced in 2023, requires a broader, ten-year comprehensive review of the classification plan as a whole. The two requirements serve different purposes and operate on separate cycles. The five-year review of individual classifications under subsection (4)(A) remains an ongoing statutory obligation, regardless of the addition of subsection (4)(C). While BHR references its internal procedures under 18-389 C.M.R. Ch. 4 as evidence of compliance, those procedures do not incorporate or reflect the statutory five-year update requirement in subsection (4)(A) or the ten-year update in subsection (4)(C). Furthermore, BHR could not provide documentation to support that 14 of the 19 job classifications tested by OSA had been reviewed or updated within the required timeframe. BHR does not have a comprehensive system to track classification review dates across the classification plan, making it difficult to demonstrate compliance with the statute or proactively manage updates. Internal policy may guide operations, but compliance is ultimately measured against the statutory requirements that govern those operations. The issues identified in audit testing also have implications for the compensation system. Under 5 MRSA 7065, the State’s compensation plan is developed based on the classification plan, with salary grades assigned to specific job classes according to documented duties and responsibilities. The classification plan is the foundational structure upon which compensation decisions are made. If job descriptions are outdated, or not periodically reviewed as required, positions may be misaligned with inappropriate salary grades, which may lead to pay that does not accurately reflect the nature or complexity of the work, including Federally-funded positions. Without a properly maintained classification system, the State cannot ensure that compensation, whether paid with State or Federal funds, is supported by a valid and compliant classification system. Under 2 CFR 200.430(a)(2), compensation for personal services is allowable under Federal awards only when it follows “an appointment made in accordance with the recipient’s…laws, rules, or written policies.” This Federal regulation places the burden of compliance on the State’s adherence to its own legal framework. The Federal government allows flexibility, but that flexibility hinges on the condition that the State follows its own laws; it is the minimum threshold for allowability requirements over personnel costs. Compliance with this law is not discretionary; it is a legal obligation and direct reflection of the expectations placed on the State by the Legislature and the Federal government. BHR asserts that State employee compensation is consistently below market rates and therefore poses no risk of overcharging Federal programs. Even if BHR’s current assertion that State salaries are below market is accepted, Federal guidance provides that reasonableness in amount is only one factor in determining allowability. Compensation must also follow lawful appointment processes and reflect compliance with State personnel laws. A claim of underpayment is not a compensating control to prevent noncompliance with required classification updates. The following statutes only serve to emphasize the responsibility placed upon BHR and the State Human Resources Officer. Under 5 MRSA 7036, the State Human Resources Officer is explicitly responsible for adopting rules for both classification and compensation plans (7036(I) and (J)), enforcing the Civil Service Law (7036(21)), and conducting both short-term and long-term planning for the State’s personnel system (7036(10)). The Officer is also responsible for responding to reclassification requests (7036(5)) and working closely with agencies on their personnel needs (7036(7)). These statutory responsibilities further confirm that maintaining accurate, up-to-date classification specifications is not discretionary. Moreover, failure to fulfill these legal duties has implications that underscore the purpose of a centralized human resources function. These conditions present a risk to the accessibility to public service employment, including potential delayed hiring decisions and diminished ability to attract and retain a skilled workforce. When classification structures are outdated and statutory mandates are not followed, BHR cannot deliver on its mission. We acknowledge BHR’s consultation with the Office of the Attorney General and its efforts to clarify its interpretation of the law; however, the condition observed during the audit period reflects a neutralization of internal controls and subsequent risk of noncompliance with statutory requirements that directly affect both classification and the allowability of personnel costs under Federal awards. The finding remains as stated. (State Number: 24-0111-01)