Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
Repeat Finding: No Questioned Costs: None Funding Agency: Department of Education AL Number: 84.351A Award Year: 10/1/2023 – 9/30/2024 Condition: The payroll distribution records did not reasonably reflect the total activity of employees. Criteria: The Organization should follow the Uniform Guidance requirement 2 CFR 200.430(i), which requires the Organization to charge the federal awards for salaries and wages must be based on records that accurately reflect the work performed, budget estimates alone do not qualify as support for charges to Federal awards. Cause: The Organization utilized budget estimates alone to calculate the salaries and wages for charges to Federal awards. This is the first year the Organization has a federal program. Effect: The Organization was not in compliance with Uniform Guidance requirements, resulting in a significant deficiency in internal control over compliance. Recommendations: We recommend that the Organization update the estimates procedures to align with what is required by the Uniform Guidance. View of Responsible Officials: Management agrees with the finding and has committed to implementing a corrective action plan.
Finding 2024-006: Timekeeping and Payroll Allocations (Significant Deficiency) Information on the Federal Program: 93.368 Criteria: According to 2 CFR Section 200.430(i) charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: i. Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ii. Be incorporated into the official records of the non-Federal entity; iii. Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; iv. Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; v. Comply with the established accounting policies and practices of the non-Federal entity; vii. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. viii. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition: We noted that while the Foundation does keep timesheets, we noted several instances in which the timesheets lacked evidence of supervisory approval. In addition, we noted several instances in which the timesheet was not dated when approved. Cause: The Foundation does not document their review and approval process consistently over timesheets. Effect or Potential Effect: Without the proper, documented, approval processes in place over timesheets, there exists the potential for allocation errors. Questioned Costs: Undetermined, as the allocations are based on employee timesheets, but it is undeterminable if those timesheets were truly accurate due to the lack of consistent, documented approval over the timesheets by a supervisor. Context: Our audit procedures consisted of testwork performed over a sample of timesheets submitted during the year under audit. We consider our sample to be representative of the population. The issue appears to be systematic in nature. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Foundation ensure that all approvals over timesheets are clearly documented and dated.
Federal Program: ALN 14.218 - Community Development Block Grants/Entitlement Grants Category: Compliance/Internal control Compliance Requirement: Allowable Costs/Cost Principles Criteria: As part of the standards for documentation of personnel expenses (2 CFR §200.430 (i)), it is required that charges to Federal awards for salaries and wages be based on records that accurately reflect the work performed and be supported by a system of internal control that ensures accuracy, allowability, and proper allocation. According to the record retention requirements (2 CFR §200.334), recipients and subrecipients are required to retain all records for three years from the date of submission of their final financial report, or from the date of submission of the respective reports if the award is renewed quarterly or annually. The federal regulations require employers to verify the identity and employment authorization of individuals hired for employment in the United States using the Employment Eligibility Verification form (I-9). The EEOC's Enforcement Guidance on Harassment in the Workplace recommends that employers periodically update their sexual harassment policies and conduct regular training to ensure compliance with federal antidiscrimination laws. 2 CFR §200.112 requires that Federal agencies establish conflict of interest policies for Federal awards. Recipients or subrecipients must disclose in writing any potential conflict of interest to the Federal agency or pass-through entity in accordance with the established Federal agency policies. Regular updates to conflict-of-interest certifications are recommended to ensure ongoing compliance. As part of the BGCPR recruitment, selection, and hiring process, it is required that the employee file includes a copy of form I-9 and a signed copy of the job description. The protocol for disclosure of conflicts of interest establishes that as part of the recruitment procedures and on an annual basis, all candidates for the board of directors, management teams, employees, and, in certain cases, investors and donors are required to complete a conflict-of-interest disclosure form. Condition: There were significant gaps in the documentation of employee files, which pose potential noncompliance risks. Cause: Lack of monitoring procedures to ascertain compliance with federal, local and internal requirements.Effect or potential effect: Failure to maintain proper documentation can result in non-compliance with federal regulations and organizational policies, potentially leading to legal penalties and ethical breaches. Questioned costs: Not determined Context: The allowable activities/cost test revealed the following: • One (1) of fifty (50) employees’ files tested did not have a copy of the Employment eligibility verification form (I- 9) • Nineteen (19) of fifty (50) employees’ files tested did not have a copy of the signed job description. • Forty-nine (49) of fifty (50) employees’ files tested did not have evidence of certification regarding compliance with conflicts of interest protocol. • Twenty-nine (29) of fifty (50) employees’ files tested did not have evidence of annual training of sexual harassment. Recommendation: We recommended that BGCPR implement comprehensive record retention policies and ensure strict adherence to established procedures. Additionally, BGCPR should establish monitoring procedures to ascertain the completeness of employee files in compliance with regulatory requirements. Views of responsible officials: BGCPR acknowledges that document retention policy does not comply with the requirements set forth in Title 2 of the Code of Federal Regulations (2 CFR §200.334). This regulation requires that all financial records, supporting documents, statistical data, and other files related to federal grants be retained for a minimum period of three years from the date of submission of the final financial report. In the absence of this policy, BGCPR exposes itself to risks of non-compliance and possible sanctions during federal audits or reviews. Therefore, it is considered a priority to develop and implement a document retention policy that ensures compliance with this regulation and strengthens institutional transparency and accountability. As a corrective measure, BGCPR will take the following actions and will anticipate completing on June 30, 2025: a. Establish clear guidelines for the creation, storage, access, updating, and disposal of records. b. Define retention periods in accordance with legal requirements. c. Develop periodic monitoring procedures to verify record completeness and compliance. d. Implement scheduled internal reviews and standardized checklists. e. Assign specific responsibilities to Human Resources personnel for policy enforcement.
FA 2024-001 Improve Controls over Employee Compensation Compliance Requirement: Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program COVID-19 – 10.555 – National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024) 225GA324N1099 (Year: 2024) Questioned Costs: $102,234 Repeat of Prior Year Finding: 2023-004 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over the employee compensation process as it relates to the Child Nutrition Cluster. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $58,647,091.23 were expended and reported on the DeKalb County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity…” Condition: A sample of 60 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if internal controls were properly functioning, and applicable compliance requirements were met. The following deficiencies were noted: • One employee who no longer worked for the School District received salary payments totaling $8,715. • Two employees did not have any of the required certifications, or comparable documentation, to support their salary payments totaling $48,837. • One employee was missing required certifications, or comparable documentation, to support a portion of their salary payments totaling $8,128. • One employee’s salary in the amount of $2,671 was incorrectly charged to the federal program for one pay period. • Documentation of additional pay totaling $33,883 could not be located for 14 employees. Questioned Costs: Upon testing a sample of $1,399,390 in personnel services expenditures, known questioned costs of $102,234 were identified for payroll charges not supported by adequate documentation. Using the total personnel services expenditure population of $18,999,516 (excluding benefits payments), we project the likely questioned costs to be approximately $1,388,035. The following Assistance Listing Numbers were affected by known and likely questioned costs: 10.553 and 10.555. Cause: A lack of oversight by personnel in the Office of Federal Grants and Program Compliance led to noncompliance with the requirements of the Uniform Guidance in relation to charging of personnel costs to a federal program. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to pay employees with CNC funds the appropriate amount and/or maintain documentation supporting those payments could result in the expenditure of funds for unallowable purposes. This may also expose the School District to unnecessary financial strains and shortages within the CNC funds as ED or GaDOE may require the School District to return funds associated with improperly documented expenditures. Recommendation: The School District should evaluate their internal control process related to the approval and retention of documentation to support employee compensation payments. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that CNC employees are paid appropriately. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are functioning properly. Views of Responsible Officials: We concur with this finding.
FA 2024-001 Improve Controls over Employee Compensation Compliance Requirement: Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program COVID-19 – 10.555 – National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024) 225GA324N1099 (Year: 2024) Questioned Costs: $102,234 Repeat of Prior Year Finding: 2023-004 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over the employee compensation process as it relates to the Child Nutrition Cluster. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $58,647,091.23 were expended and reported on the DeKalb County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity…” Condition: A sample of 60 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if internal controls were properly functioning, and applicable compliance requirements were met. The following deficiencies were noted: • One employee who no longer worked for the School District received salary payments totaling $8,715. • Two employees did not have any of the required certifications, or comparable documentation, to support their salary payments totaling $48,837. • One employee was missing required certifications, or comparable documentation, to support a portion of their salary payments totaling $8,128. • One employee’s salary in the amount of $2,671 was incorrectly charged to the federal program for one pay period. • Documentation of additional pay totaling $33,883 could not be located for 14 employees. Questioned Costs: Upon testing a sample of $1,399,390 in personnel services expenditures, known questioned costs of $102,234 were identified for payroll charges not supported by adequate documentation. Using the total personnel services expenditure population of $18,999,516 (excluding benefits payments), we project the likely questioned costs to be approximately $1,388,035. The following Assistance Listing Numbers were affected by known and likely questioned costs: 10.553 and 10.555. Cause: A lack of oversight by personnel in the Office of Federal Grants and Program Compliance led to noncompliance with the requirements of the Uniform Guidance in relation to charging of personnel costs to a federal program. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to pay employees with CNC funds the appropriate amount and/or maintain documentation supporting those payments could result in the expenditure of funds for unallowable purposes. This may also expose the School District to unnecessary financial strains and shortages within the CNC funds as ED or GaDOE may require the School District to return funds associated with improperly documented expenditures. Recommendation: The School District should evaluate their internal control process related to the approval and retention of documentation to support employee compensation payments. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that CNC employees are paid appropriately. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are functioning properly. Views of Responsible Officials: We concur with this finding.
FA 2024-001 Improve Controls over Employee Compensation Compliance Requirement: Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program COVID-19 – 10.555 – National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024) 225GA324N1099 (Year: 2024) Questioned Costs: $102,234 Repeat of Prior Year Finding: 2023-004 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over the employee compensation process as it relates to the Child Nutrition Cluster. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $58,647,091.23 were expended and reported on the DeKalb County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity…” Condition: A sample of 60 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if internal controls were properly functioning, and applicable compliance requirements were met. The following deficiencies were noted: • One employee who no longer worked for the School District received salary payments totaling $8,715. • Two employees did not have any of the required certifications, or comparable documentation, to support their salary payments totaling $48,837. • One employee was missing required certifications, or comparable documentation, to support a portion of their salary payments totaling $8,128. • One employee’s salary in the amount of $2,671 was incorrectly charged to the federal program for one pay period. • Documentation of additional pay totaling $33,883 could not be located for 14 employees. Questioned Costs: Upon testing a sample of $1,399,390 in personnel services expenditures, known questioned costs of $102,234 were identified for payroll charges not supported by adequate documentation. Using the total personnel services expenditure population of $18,999,516 (excluding benefits payments), we project the likely questioned costs to be approximately $1,388,035. The following Assistance Listing Numbers were affected by known and likely questioned costs: 10.553 and 10.555. Cause: A lack of oversight by personnel in the Office of Federal Grants and Program Compliance led to noncompliance with the requirements of the Uniform Guidance in relation to charging of personnel costs to a federal program. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to pay employees with CNC funds the appropriate amount and/or maintain documentation supporting those payments could result in the expenditure of funds for unallowable purposes. This may also expose the School District to unnecessary financial strains and shortages within the CNC funds as ED or GaDOE may require the School District to return funds associated with improperly documented expenditures. Recommendation: The School District should evaluate their internal control process related to the approval and retention of documentation to support employee compensation payments. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that CNC employees are paid appropriately. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are functioning properly. Views of Responsible Officials: We concur with this finding.
2024-002 INSUFFICIENT WIOA ELIGIBILITY DOCUMENTATION Federal Agency: U.S. Department of Labor Federal Program and Assistance Listing Number: 17.265 Type of Finding: Significant Deficiency, Non-compliance Compliance Area: Eligibility Award Period: National Employment and Training (07/01/2022-06/30/2025) National Employment and Training (06/01/2023-06/30/2026) Questioned Costs: None Condition: 1 out of 40 sampled applications lacked sufficient documentation to support eligibility under WIOA Section 166. Specifically, the file was missing verification of tribal affiliation, proof of residency, and documentation of public assistance status. Criteria: Per 2 CFR §200.303 and §200.430, recipients of federal funds must establish and maintain effective internal controls to ensure compliance with federal statutes, regulations, and the terms and conditions of the award. The NIYC-WIOA Policy Manual requires that eligibility determinations be supported by verifiable documentation, including tribal enrollment records, residency verification, and evidence of low-income or public assistance status. Effect: Failure to maintain complete eligibility documentation may result in noncompliance with federal program requirements, potential disallowed costs, and increased risk of audit findings or funding claw backs. Cause: The missing documentation was attributed to a participant file being misplaced during a staff transition, indicating a lack of centralized and secure file management protocols.
2024-003 INSUFFICIENT PAYROLL AUTHORIZATION AND TIMESHEET CONTROLS Federal Agency: U.S. Department of Labor Federal Program and Assistance Listing Number: 17.265 Type of Finding: Significant Deficiency, Non-compliance Compliance Area: Allowable Costs (Payroll) Award Period: National Employment and Training (07/01/2022-06/30/2025) National Employment and Training (06/01/2023-06/30/2026) Questioned Costs: None Condition: Our testing of payroll disbursements identified the following exceptions: -One (1) out of 45 payroll transactions lacked supporting documentation for an approved pay rate change. -One (1) out of 45 payroll transactions resulted in an overpayment for 52 hours instead of the authorized 20 hours. Criteria: Per 2 CFR §200.430 and NIYC's Fiscal Manual, all payroll transactions must be supported by appropriate documentation, including approved personnel action forms for rate changes and verified timesheets. Payroll must be reviewed and approved by designated personnel prior to processing. Effect: These deficiencies increase the risk of financial loss, inaccurate payroll reporting, and noncompliance with federal cost principles. They also undermine the reliability of internal controls over payroll processing. Cause: The overpayment was due to a clerical error in the Work Experience (WEX) timesheet process. The missing pay rate documentation was not retained during a period of organizational restructuring.
Statement of condition: Time certifications that support salaries and wages charged to the Education Stabilization program were not maintained. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause of condition: Policies and procedures are in place which require time certifications to be maintained for all employees paid from federal funds. However, due to turnover of key personnel, these policies and procedures were not followed in the current year. Effect of condition: Without proper documentation, it cannot be verified that salaries and wages charged to the Education Stabilization program were based on actual time spent on allowable program-related activities. Context: Time certifications were not maintained for any employees paid from Education Stabilization Funds. This resulted in questioned costs of $2,548,644. Recommendation: To ensure that salaries and wages charged to federal award programs are accurate, time certifications should be maintained for all employees paid from federal funds. All time certifications should be signed by the employee and reviewed and approved by the appropriate School personnel, as evidenced by the School personnel’s signature. We also recommend that the Federal Program Director position is filled by an individual that has training and knowledge of the federal program they are administering. Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place for the review and approval of time certifications.
Statement of condition: Time certifications that support salaries and wages charged to Title I, Part A were not maintained for all employees. Of the time certifications that were maintained, not all showed evidence of review and approval performed. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause of condition: Policies and procedures are in place which require time certifications to be maintained for all employees paid from federal funds. However, due to turnover of key personnel, these policies and procedures were not followed in the current year. Effect of condition: Without proper documentation, it cannot be verified that salaries and wages charged to Title I, Part A were based on actual time spent on allowable program-related activities. Context: A sample of 40 employees paid with Title I, Part A funds were selected for testing. The audit testing found that time certifications were not maintained for 22 of the 40 employees. This resulted in questioned costs of $40,403. Additionally, the audit testing found that one employee’s time certification had no evidence of review and approval from appropriate School personnel. Recommendation: To ensure that salaries and wages charged to federal award programs are accurate, time certifications should be maintained for all employees paid from federal funds. All time certifications should be signed by the employee and reviewed and approved by the appropriate School personnel, as evidenced by the School personnel’s signature. We also recommend that the Federal Program Director position is filled by an individual that has training and knowledge of the federal program they are administrating. Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place for the maintenance, review, and approval of time certifications. See 2024-005 for management's detailed action plan surrounding the time certification findings.
Statement of condition: The allocation of salaries and wages charged to the Title I, Part A program for employees tested was not accurate per supporting documentation of time certifications. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The School’s time certifications meet this regulation but these time certifications do not support the allocation of pay for these employees. Cause of condition: Procedures are in place for personnel to review the accuracy of the time certification and to ensure accuracy in the recording of how salaries and wages are allocated in accordance with the time certifications. However, there was a breakdown in this control. Effect of condition: During testing, it was noted that time certifications for employees who were paid with Title I, Part A funds were not supported by time certifications which state actual time worked by program for each employee. Context: A sample of 40 employees paid with Title I, Part A funds were selected for testing. The audit testing found that 8 of the employees’ time certifications indicated that they worked less hours in the program than what was actually charged to the program. This resulted in questioned costs of $3,225. Recommendation: To ensure that salaries and wages charged to federal award programs are supported by time certifications, a review of completed time certifications should be compared to salaries and wages recorded to the program. Views of responsible officials and planned corrective actions: Management agrees with this finding and will review time certifications in comparison to salaries and wages recorded to federal programs. See 2024-005 for management's detailed action plan surrounding the time certification findings.
Assistance Listing Number(s): 84.425V Name of Federal Program or Cluster: COVID-19 Education Stabilization Fund (ESF), American Rescue Plan – Emergency Assistance to Non-Public Schools (ARP EANS) Name of Federal Agency: Department of Education Federal Award Identification Number: S425V210042 Federal Award Date: February 26, 2021 and September 24, 2021 Name of Pass-through Entity: State of North Carolina Pass-through Entity Identifying Number: 60-04 and 60-05 Award Period: July 1, 2022 through September 30, 2023 and July 1, 2022 through September 30, 2024 Criteria: Uniform Guidance 2 CFR 200.430 requires charges to federal awards for compensation must be based on records that accurately reflect the work performed. Condition: 2 out of a total of 11 employees’ compensation and benefits charged to the federal award for the fiscal year were not supported by time and effort documentation. 13 out of the total 43 quarterly compensation and benefits charged were greater than the amount supported by the time and effort documentation. A total of $278,803 of personnel and fringe were charged to the federal award. Cause: Budgeted amounts were used, but no system of review and adjustments to actual were performed. A written policy and procedures over documenting time and effort was not designed and implemented. Effect or Potential Effect: Unsupported compensation and benefits charged to the program may be disallowed. Questioned Costs: $21,249 for the compensation costs and related employee benefits charged for the 2 employees that were not supported by time and effort documentation. $20,472 for the 13 quarterly compensation and related benefits that were greater than the time and effort documentation supported. Context: For the audit all employees whose compensation and benefits were charged to the federal award retroactively provided signed quarterly time and effort documentation. These documentations were reviewed and approved by their supervisors. Auditor viewed all 11 employees quarterly time and effort documentation. While there were 13 quarterly compensation and benefits charges that were greater than the amount supported, there were 14 quarterly compensation and benefits that were undercharged by $35,871. Repeat Finding: No Recommendation: Time and effort documentation be documented per Uniform Guidance requirements and used to review and adjust budgeted compensation and benefit costs charged to the award to be accurate, allowable, and properly allocated. Written policies and procedures should be designed and implemented for documentation of time and effort. Views of Responsible Officials: The organization agrees with the finding.
Assistance Listing Number(s): 84.425V Name of Federal Program or Cluster: COVID-19 Education Stabilization Fund (ESF), American Rescue Plan – Emergency Assistance to Non-Public Schools (ARP EANS) Name of Federal Agency: Department of Education Federal Award Identification Number: S425V210042 Federal Award Date: February 26, 2021 and September 24, 2021 Name of Pass-through Entity: State of North Carolina Pass-through Entity Identifying Number: 60-04 and 60-05 Award Period: July 1, 2022 through September 30, 2023 and July 1, 2022 through September 30, 2024 Criteria: Uniform Guidance 2 CFR 200.430 requires charges to federal awards for compensation must be based on records that accurately reflect the work performed. Condition: 2 out of a total of 11 employees’ compensation and benefits charged to the federal award for the fiscal year were not supported by time and effort documentation. 13 out of the total 43 quarterly compensation and benefits charged were greater than the amount supported by the time and effort documentation. A total of $278,803 of personnel and fringe were charged to the federal award. Cause: Budgeted amounts were used, but no system of review and adjustments to actual were performed. A written policy and procedures over documenting time and effort was not designed and implemented. Effect or Potential Effect: Unsupported compensation and benefits charged to the program may be disallowed. Questioned Costs: $21,249 for the compensation costs and related employee benefits charged for the 2 employees that were not supported by time and effort documentation. $20,472 for the 13 quarterly compensation and related benefits that were greater than the time and effort documentation supported. Context: For the audit all employees whose compensation and benefits were charged to the federal award retroactively provided signed quarterly time and effort documentation. These documentations were reviewed and approved by their supervisors. Auditor viewed all 11 employees quarterly time and effort documentation. While there were 13 quarterly compensation and benefits charges that were greater than the amount supported, there were 14 quarterly compensation and benefits that were undercharged by $35,871. Repeat Finding: No Recommendation: Time and effort documentation be documented per Uniform Guidance requirements and used to review and adjust budgeted compensation and benefit costs charged to the award to be accurate, allowable, and properly allocated. Written policies and procedures should be designed and implemented for documentation of time and effort. Views of Responsible Officials: The organization agrees with the finding.
Reference Number: 2024-013 Prior Year Finding: 2023-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: 24A55AY000057 (4/1/2024 – 6/30/2027), 23A55AY000020 (4/1/2023 – 6/30/2026), 23A55AT000036 (7/1/2023 – 6/30/2026), 23A55AW000048 (7/1/2023 – 6/30/2026), AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, • Be incorporated into the official records of the non-Federal entity, • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, • Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, • Comply with the established accounting policies and practices of the non-Federal entity, • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: Combination codes are used by employees to allocate and certify hours worked to Federal grants and employees’ supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system defaults to budgeted grant allocations entered into the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). Three of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. This resulted in the amount charged to the program being based on budgeted allocation and not based on the employee’s actual time and effort on the program. Cause: The Department’s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Noncompliance occurred as payroll charges allocated to the grants were not reflective of actual activity for which the employees were compensated. Questioned costs: Undetermined amount related to budgeted combination codes. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort and a combination code that is allowable under the program. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of Responsible Officials: There is no disagreement with the finding.
Reference Number: 2024-013 Prior Year Finding: 2023-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: 24A55AY000057 (4/1/2024 – 6/30/2027), 23A55AY000020 (4/1/2023 – 6/30/2026), 23A55AT000036 (7/1/2023 – 6/30/2026), 23A55AW000048 (7/1/2023 – 6/30/2026), AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, • Be incorporated into the official records of the non-Federal entity, • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, • Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, • Comply with the established accounting policies and practices of the non-Federal entity, • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: Combination codes are used by employees to allocate and certify hours worked to Federal grants and employees’ supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system defaults to budgeted grant allocations entered into the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). Three of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. This resulted in the amount charged to the program being based on budgeted allocation and not based on the employee’s actual time and effort on the program. Cause: The Department’s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Noncompliance occurred as payroll charges allocated to the grants were not reflective of actual activity for which the employees were compensated. Questioned costs: Undetermined amount related to budgeted combination codes. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort and a combination code that is allowable under the program. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of Responsible Officials: There is no disagreement with the finding.
Reference Number: 2024-013 Prior Year Finding: 2023-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: 24A55AY000057 (4/1/2024 – 6/30/2027), 23A55AY000020 (4/1/2023 – 6/30/2026), 23A55AT000036 (7/1/2023 – 6/30/2026), 23A55AW000048 (7/1/2023 – 6/30/2026), AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, • Be incorporated into the official records of the non-Federal entity, • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, • Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, • Comply with the established accounting policies and practices of the non-Federal entity, • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: Combination codes are used by employees to allocate and certify hours worked to Federal grants and employees’ supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system defaults to budgeted grant allocations entered into the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). Three of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. This resulted in the amount charged to the program being based on budgeted allocation and not based on the employee’s actual time and effort on the program. Cause: The Department’s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Noncompliance occurred as payroll charges allocated to the grants were not reflective of actual activity for which the employees were compensated. Questioned costs: Undetermined amount related to budgeted combination codes. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort and a combination code that is allowable under the program. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of Responsible Officials: There is no disagreement with the finding.
2024-005 Compliance and Significant Deficiency in Internal Control over compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles U.S. Department of Education Passed through NYS Department of Education Program Name: Education Stabilization Fund AL#: 84.425U Condition: Time and effort documentation requirements in accordance with 2CFR 200.430(i) Compensation – Personal Services, Standards for Documentation were not being followed for the first 9 months of the fiscal year. Criteria: According to 2 CFR, Part 430(i)(l) of the Office of Management and Budget’s Uniform Grant Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; b) Be incorporated into the official records of the non-Federal entity; c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity; d) Encompass both federally assisted and all other activities compensated by the non-Federal entity; e) Support the distribution of the employee’s salary or wages amount specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Context: We reviewed the files maintained by the district for the fiscal year and found that the certification process had not been done until May 2024. Cause: The District did not have sufficient internal controls in place to ensure that the payroll certification process was being performed. Effect: Without adequate internal controls over the employee’s time being charged to the grant and the certification requirement, the School District cannot ensure that federal funds are paid in accordance with allowable costs and the time worked in the grant. Additionally, they cannot easily monitor the amount of funds that can be charged to the grant for salaries and benefits. .The District is not in compliance with the requirements of the Education Stabilization Fund program with respect to Activities Allowed or Unallowed and Allowable Costs. Questioned Costs: Support for the employees’ whose time was charged to the Federal award programs in question was reviewed and it was determined that for all employees the time being charged to the grant was appropriate, therefore, there were no questioned costs. Recommendation: We recommend that the District’s written procedures addressing internal controls with respect to program requirements be followed to ensure the District is in compliance at all times. We recommend that the District ensures that the employees working in the grants are certifying their actual percent of time and effort that is being spent working in the federal award programs by all employees whose time is charged to the grant and that they are completed timely after the fact. Monthly certifications should be completed if less than 100% of time is being worked in the federal award program or semiannually if 100% of time is being spent. View of Responsible Officials: Highland Falls-Fort Montgomery Central School District’s management concurs with this finding. The District is in the process of implementing procedures to ensure that compliance is maintained in the future. Please refer to the corrective action plan .
2024-005 Compliance and Significant Deficiency in Internal Control over compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles U.S. Department of Education Passed through NYS Department of Education Program Name: Education Stabilization Fund AL#: 84.425U Condition: Time and effort documentation requirements in accordance with 2CFR 200.430(i) Compensation – Personal Services, Standards for Documentation were not being followed for the first 9 months of the fiscal year. Criteria: According to 2 CFR, Part 430(i)(l) of the Office of Management and Budget’s Uniform Grant Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; b) Be incorporated into the official records of the non-Federal entity; c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity; d) Encompass both federally assisted and all other activities compensated by the non-Federal entity; e) Support the distribution of the employee’s salary or wages amount specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Context: We reviewed the files maintained by the district for the fiscal year and found that the certification process had not been done until May 2024. Cause: The District did not have sufficient internal controls in place to ensure that the payroll certification process was being performed. Effect: Without adequate internal controls over the employee’s time being charged to the grant and the certification requirement, the School District cannot ensure that federal funds are paid in accordance with allowable costs and the time worked in the grant. Additionally, they cannot easily monitor the amount of funds that can be charged to the grant for salaries and benefits. .The District is not in compliance with the requirements of the Education Stabilization Fund program with respect to Activities Allowed or Unallowed and Allowable Costs. Questioned Costs: Support for the employees’ whose time was charged to the Federal award programs in question was reviewed and it was determined that for all employees the time being charged to the grant was appropriate, therefore, there were no questioned costs. Recommendation: We recommend that the District’s written procedures addressing internal controls with respect to program requirements be followed to ensure the District is in compliance at all times. We recommend that the District ensures that the employees working in the grants are certifying their actual percent of time and effort that is being spent working in the federal award programs by all employees whose time is charged to the grant and that they are completed timely after the fact. Monthly certifications should be completed if less than 100% of time is being worked in the federal award program or semiannually if 100% of time is being spent. View of Responsible Officials: Highland Falls-Fort Montgomery Central School District’s management concurs with this finding. The District is in the process of implementing procedures to ensure that compliance is maintained in the future. Please refer to the corrective action plan .
2024-005 Compliance and Significant Deficiency in Internal Control over compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles U.S. Department of Education Passed through NYS Department of Education Program Name: Education Stabilization Fund AL#: 84.425U Condition: Time and effort documentation requirements in accordance with 2CFR 200.430(i) Compensation – Personal Services, Standards for Documentation were not being followed for the first 9 months of the fiscal year. Criteria: According to 2 CFR, Part 430(i)(l) of the Office of Management and Budget’s Uniform Grant Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; b) Be incorporated into the official records of the non-Federal entity; c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity; d) Encompass both federally assisted and all other activities compensated by the non-Federal entity; e) Support the distribution of the employee’s salary or wages amount specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Context: We reviewed the files maintained by the district for the fiscal year and found that the certification process had not been done until May 2024. Cause: The District did not have sufficient internal controls in place to ensure that the payroll certification process was being performed. Effect: Without adequate internal controls over the employee’s time being charged to the grant and the certification requirement, the School District cannot ensure that federal funds are paid in accordance with allowable costs and the time worked in the grant. Additionally, they cannot easily monitor the amount of funds that can be charged to the grant for salaries and benefits. .The District is not in compliance with the requirements of the Education Stabilization Fund program with respect to Activities Allowed or Unallowed and Allowable Costs. Questioned Costs: Support for the employees’ whose time was charged to the Federal award programs in question was reviewed and it was determined that for all employees the time being charged to the grant was appropriate, therefore, there were no questioned costs. Recommendation: We recommend that the District’s written procedures addressing internal controls with respect to program requirements be followed to ensure the District is in compliance at all times. We recommend that the District ensures that the employees working in the grants are certifying their actual percent of time and effort that is being spent working in the federal award programs by all employees whose time is charged to the grant and that they are completed timely after the fact. Monthly certifications should be completed if less than 100% of time is being worked in the federal award program or semiannually if 100% of time is being spent. View of Responsible Officials: Highland Falls-Fort Montgomery Central School District’s management concurs with this finding. The District is in the process of implementing procedures to ensure that compliance is maintained in the future. Please refer to the corrective action plan .
2024-005 Compliance and Significant Deficiency in Internal Control over compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles U.S. Department of Education Passed through NYS Department of Education Program Name: Education Stabilization Fund AL#: 84.425U Condition: Time and effort documentation requirements in accordance with 2CFR 200.430(i) Compensation – Personal Services, Standards for Documentation were not being followed for the first 9 months of the fiscal year. Criteria: According to 2 CFR, Part 430(i)(l) of the Office of Management and Budget’s Uniform Grant Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; b) Be incorporated into the official records of the non-Federal entity; c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity; d) Encompass both federally assisted and all other activities compensated by the non-Federal entity; e) Support the distribution of the employee’s salary or wages amount specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Context: We reviewed the files maintained by the district for the fiscal year and found that the certification process had not been done until May 2024. Cause: The District did not have sufficient internal controls in place to ensure that the payroll certification process was being performed. Effect: Without adequate internal controls over the employee’s time being charged to the grant and the certification requirement, the School District cannot ensure that federal funds are paid in accordance with allowable costs and the time worked in the grant. Additionally, they cannot easily monitor the amount of funds that can be charged to the grant for salaries and benefits. .The District is not in compliance with the requirements of the Education Stabilization Fund program with respect to Activities Allowed or Unallowed and Allowable Costs. Questioned Costs: Support for the employees’ whose time was charged to the Federal award programs in question was reviewed and it was determined that for all employees the time being charged to the grant was appropriate, therefore, there were no questioned costs. Recommendation: We recommend that the District’s written procedures addressing internal controls with respect to program requirements be followed to ensure the District is in compliance at all times. We recommend that the District ensures that the employees working in the grants are certifying their actual percent of time and effort that is being spent working in the federal award programs by all employees whose time is charged to the grant and that they are completed timely after the fact. Monthly certifications should be completed if less than 100% of time is being worked in the federal award program or semiannually if 100% of time is being spent. View of Responsible Officials: Highland Falls-Fort Montgomery Central School District’s management concurs with this finding. The District is in the process of implementing procedures to ensure that compliance is maintained in the future. Please refer to the corrective action plan .
Assistance Listing: 84.351 C.A.R.E. Condition: Cleveland Play House does not have adequate documentation to support all charges to the federal program. Of the 40 payroll charges tested, 2 did not have adequate documentation. Criteria: 2 CFR 200.430(i) states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 2 CFR 200.403(g) states that for costs to be allowed under Federal awards, they must be adequately documented. Cause: Due to significant organizational turnover in fiscal years 2022, 2023, and 2024, certain individuals did not have expense reimbursements requested based on actual hours worked on grant related activities. Although management maintained authorized time cards during each pay period, expense reimbursements were requested in a greater amount than hours actually worked on the grant. Effect: Cleveland Play House did not have adequate documentation to support all costs charged to the federal program. In addition, an ineffective financial management system could lead to incorrect identification of costs charged to a federal program and an inability to substantiate that doublecharging did not occur. Repeat finding: This is a repeat finding, refer to 2022-002 and 2023-002. Questioned costs: Payroll: $3,846 Recommendation: We continue to recommend that Cleveland Play House develop a policy and procedure to ensure that all hours submitted for federal reimbursement are supported with timesheets that are approved by a supervisor. Views of responsible officials: Management concurs with this recommendation. See also corrective action plan.
Finding No. 2024-057 Federal Awarding Agency: USDHHS Impact: Significant Deficiency, Noncompliance AL Number and Title: 93.558 TANF Federal Award Number: 2401AKTANF, 2301AKTANF Applicable Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Condition: Insufficient documentation was available to support the manual transfer of time originally coded to another federal program to the TANF program. Context: In a statistically valid sample, two of sixty selections showed time coded to the employee’s time sheet for the Low-Income Home Energy Assistance Program (LIHEAP) that was later manually transferred to TANF. During the audit, a verbal explanation was given that this was done for budgetary reasons, as they are similar activities that can be coded to both LIHEAP and TANF. However, there was insufficient documentation to support that the transferred time was reasonable under the TANF program. Both of the deficient selections were for the same employee. Cause: Inadequate understanding of the documentation needed to support manual adjustments to payroll. Criteria: Per 2 CFR 200.430, costs of compensation are allowable to the extent that they are reasonable for the services rendered and conform to the established written policy of the recipient or subrecipient and meet the standards for documentation of personnel expenses, as outlined in 200.430(g). Effect: Unallowable costs may lead to potential penalties, increased audit scrutiny, distorted indirect cost rates, and the need to repay funds. Questioned Costs: AL 93.558: $1,730 Recommendation: DOH management should improve documentation kept to support manual interference with payroll costs. Views of Responsible Officials: The department does not agree with the finding. The Division of Public Assistance (DPA) met with CLA regarding the questioned costs which were explained and documented. For the sample selected, the employee did positive time keep to LDP U6615 - LIHEAP Policy for their time spent processing heating assistance applications. This was during a time when our Policy section was understaffed, and the administrative section absorbed programmatic duties. The division followed the State of Alaska’s payroll correction process. When IRIS-HRM (payroll) interfaced to IRIS-FIN (financial), the payroll transactions errored due to insufficient program budget. The Department of Administration, Division of Finance provides an erroring payroll transaction report. The departments are instructed to update the report with correct financial coding and send to a BOT email address. The BOT enters the correction in the State’s financial system and attaches the spreadsheet to document the update in coding. Department staff do not have permissions to add notes or additional attachments to the payroll transaction. DPA accounting staff reviewed the errored transaction and identified another allowable fund source to code these expenditures to. Therefore, the payroll expenses were adjusted and charged to the TANF program. Auditor’s Concluding Remarks: Cost transfers must be sufficiently documented in accordance with the provisions of the Office of Management and Budget (“OMB”) as part of 2 CFR Part 200, Subpart E (Uniform Guidance). Under the Uniform Guidance, costs must meet the following conditions: • Be necessary and reasonable for the performance of the award and be allocable to the award; • Be allowable (the cost is allowed by federal regulations, sponsor terms and conditions, including program specific requirements); • Treated consistently (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); • Be adequately documented. The Uniform Guidance also states that any cost allocable to a federal award may not be charged to other federal awards to overcome fund deficiencies, to avoid restrictions imposed by regulations of terms and conditions of the federal award, or for other reasons. The auditor concluded that DPA did not have adequate documentation to support the activities the employee provided to the TANF program were allowable.
Criteria or Specific Requirement: In accordance with 2 CFR 200.430, compensation for personal services must be based on records that accurately reflect the work performed and must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During the testing of federal expenditures, specifically over the accounting for payroll expenditures submitted for reimbursement, we noted that payroll expenditures for one employee included an additional month’s payroll costs attributable to a different employee covered under the same grant. Context: Payroll expenditures were duplicated due to an accounting error, which overstated the payroll expenditures applied to the grant. Questioned Costs: $6,358 consisting of payroll expenditures duplicated during the July 2023 through January 2024 reporting period. Cause: The variance appears to have resulted from a lack of sufficient internal controls over the accurate accounting and review of payroll costs charged to the federal program. In particular, Solvista Health did not implement a process for the review and approval for the final payroll costs submitted for reimbursement, which resulted in errors. Effect: Failure to submit accurately accounted for payroll expenditures to the federal program, may result in noncompliance with federal regulations over allowable costs, as well as questioned costs related to the incorrect submitted payroll expenditures. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that Solvista Health implement a system of internal controls that are designed and operating to provide an accurate accounting of payroll costs incurred under the federal programs, including review and monitoring of processes and procedures. In addition, documentation ensuring accurate payroll costs allocated to federal programs, along with support of review and approval of such charges, should be retained in accordance with federal regulations.
Criteria or Specific Requirement: In accordance with 2 CFR 200.430, fringe benefits should be allocated based on an approved indirect cost rate agreement (if applicable) or on actual costs when no approved rate exists. If a predetermined or negotiated rate has been established, it must be applied consistently and accurately across all programs. Condition: Solvista Health utilized a fringe benefit allocation rate of 31.15% when allocating fringe benefit expenditures to the Certified Community Behavioral Health Clinic Expansion Grant. However, the maximum agreed-upon fringe benefit rate submitted to the grantor was 30.15%. Additionally, it was noted that the actual fringe benefit expenditures incurred by the organization during the period were estimated at 25%. Context: Fringe benefits should have been charged at a rate consistent with Solvista Health’s actual fringe benefit expenditures incurred and should not have exceeded the maximum allowed rate. These errors resulted in an overstatement of fringe benefits and related indirect costs applied to the grant. Questioned Costs: $18,307 consisting of an accounting error in applying a fringe benefit rate higher than the maximum rate, in addition to applying the maximum fringe benefit rate rather than actual fringe benefit expenditures incurred. Cause: These errors were due to clerical errors in applying a fringe benefit rate higher than the agreed upon maximum fringe benefit rate, in addition to applying a maximum fringe benefit rate to the program rather than actual fringe benefit expenditures incurred by Solvista Health. Solvista Health lacks a properly designed and implemented system of internal control with regards to review and approval of costs submitted for reimbursement, Effect: Solvista Health improperly overstated fringe benefit expenditures allocated to the federal program during the performance period. This resulted in an excess reimbursement of program expenditures and questioned costs. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that Solvista Health design and implement a system of internal controls which includes a review process to ensure accurate use of approved fringe benefit rates in all federal reporting. Additionally, management should reconcile budgeted and actual fringe benefit costs regularly to ensure continued compliance.
Criteria or Specific Requirement: In accordance with 2 CFR 200.302, non-federal entities must maintain financial systems that provide for the identification, of all federal awards received and expended, including revenues and expenditures tracked separately by federal program. Additionally, 2 CFR 200.430(i) requires that charges to federal awards for salaries and wages be based on records that accurately reflect the work performed and must be supported by a system of internal control. Condition and Context: During the audit, it was noted that Solvista Health did not ensure that an eligible employee’s time was properly coded to the federal grant. Furthermore, the organization did not separately track grant revenues and expenditures from its general operating funds, making it difficult to clearly identify program-specific activity related to the federal award. Questioned Costs: N/A Cause: Solvista Health did not implement sufficient internal control procedures to ensure that employee timecards were accurately coded to the appropriate grant, nor to ensure that grant revenues and expenditures were tracked separately from general operating funds in accordance with grant and federal requirements. Effect: Failure to properly code eligible employee time to the appropriate grant and to separately track grant revenues and expenditures increases the risk of unallowable activities and possible questioned costs. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that Solvista Health implement internal controls over tracking of expenditures related to federal award grants and the related reimbursed cost to ensure compliance with federal requirements.
Criteria or Specific Requirement: In accordance with 2 CFR 200.430, compensation for personal services must be based on records that accurately reflect the work performed and must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During the testing of allowable costs, we determined that Solvista Health submitted payroll expenditures for reimbursement that exceeded recalculated amounts based on underlying payroll records, timesheets, and approved pay rates. Context: Payroll expenditures submitted for reimbursement were in excess of actual payroll amounts per the employees’ time sheets and approved pay rates. Questioned Costs: $3,268 consisting of payroll expenditures submitted for reimbursement in excess of actual payroll expenditures per supporting documents. Cause: The variance appears to have resulted from a lack of sufficient internal controls over the accurate calculation and review of payroll costs charged to the federal program. In particular, Solvista Health did not implement a process for the review and approval for the final payroll costs submitted for reimbursement, which resulted in errors. Effect: Failure to submit accurately calculated payroll expenditures to the federal program, may result in noncompliance with federal regulations over allowable costs, as well as questioned costs related to the incorrectly submitted payroll expenditures. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that Solvista Health implement a system of internal controls that are designed and operating to provide an accurate calculation of payroll costs incurred under the federal programs, including review and monitoring of process and procedures. In addition, documentation ensuring accurate payroll costs allocated to federal programs, along with support of review and approval of such expenditures, should be retained in accordance with federal regulations.
Criteria or Specific Requirement: In accordance with 2 CFR 200.430, compensation for personal services must be based on records that accurately reflect the work performed and must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During the testing of allowable costs, we determined that Solvista Health submitted payroll expenditures for reimbursement that exceeded recalculated amounts based on underlying payroll records, timesheets, and approved pay rates. Context: Payroll expenditures submitted for reimbursement were in excess of actual payroll amounts per the employees’ time sheets and approved pay rates. Questioned Costs: $3,268 consisting of payroll expenditures submitted for reimbursement in excess of actual payroll expenditures per supporting documents. Cause: The variance appears to have resulted from a lack of sufficient internal controls over the accurate calculation and review of payroll costs charged to the federal program. In particular, Solvista Health did not implement a process for the review and approval for the final payroll costs submitted for reimbursement, which resulted in errors. Effect: Failure to submit accurately calculated payroll expenditures to the federal program, may result in noncompliance with federal regulations over allowable costs, as well as questioned costs related to the incorrectly submitted payroll expenditures. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that Solvista Health implement a system of internal controls that are designed and operating to provide an accurate calculation of payroll costs incurred under the federal programs, including review and monitoring of process and procedures. In addition, documentation ensuring accurate payroll costs allocated to federal programs, along with support of review and approval of such expenditures, should be retained in accordance with federal regulations.
2024-005 Promoting Safe and Stable Families, Assistance Listing No. 93.556 Criteria: 2 CFR 200.430(g)(1) states, “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: Out of forty payroll transactions tested, we noted two instances where hourly employees did not have their timecard approved by their supervisor. We consider this condition to be an instance of noncompliance relating to the Allowable Costs/Cost Principles compliance requirement. Statistical sampling was not used in making sample selections. Cause and effect: Without proper review of hours worked, there may be portions of pay charged to a federal award where the employee did not work or did not work on the program for the related federal award. Questioned Costs: $2,159 Recommendation: We recommend that The Baby Fold reviews their policies and procedures to ensure all hourly employees have their timecards reviewed and approved by individuals who work closely with the individual and would be aware of the hours worked. Views of Responsible Officials: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS00109-22; H80CS00109-23 Award Period: May 1, 2023 – April 30, 2024; May 1, 2024 – April 30, 2025 Type of Finding: Material Weakness in Internal Control over Compliance and Immaterial Noncompliance Criteria or specific requirement: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; and 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 (2 CFR 200.430(i)(1)). Condition: Payroll costs charged to federal grants were either missing documentation related to time and effort or were allocated to grants in a manner inconsistent with the time and effort documentation provided. Questioned costs: $7,444 Context: Six (6) of forty (40) allowable cost transactions selected for testing were related to payroll costs and were missing time and effort documentation. Eight (8) of forty (40) allowable cost transactions selected for testing were related to payroll costs which were allocated to the grant in a manner inconsistent with the time and effort documentation provided. Two (2) of forty (40) allowable cost transactions selected for testing were related to payroll and contained a difference between the hours worked per the timesheet and hours paid per the payroll register. Cause: Unknown Effect: Grants may be allocated costs in a manner which is inconsistent with the actual level of effort associated with the underlying employee. Repeat Finding: No. Recommendation: Management should reenforce the requirement to retain time and effort documentation for all employees that are allocated to multiple grants and implement a review process whereby the allocation percentages used are compared to the employee attestations provided. Views of responsible officials: There is no disagreement with this finding.
Criteria: In accordance with 2 CFR, §200.430(i)(1)(i), the School should maintain records that are supported by a system of internal control which provides reasonable assurance that the amounts charged to the grant are accurate. Condition and context: We noted the following errors out of a sample of forty payroll transactions that we tested for the payroll periods ended February 9, 2024 and April 19, 2024: 1) one employee was not paid at the correct rate of pay for both pay periods. Cause: Documentation was not sufficient to support all amounts paid to employees and internal controls were not effective in preventing payroll errors. Effect: There is an increased risk that employee compensation will not be paid accurately and amounts charged to federal programs will not be properly supported. Recommendation: To help ensure that charges to payroll expenses are properly supported and accurate, the School should implement internal control policies and procedures that requires periodic reviews of employee records as it relates to payrates, amounts recorded on timesheets, and time off approvals.
Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.
Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.
Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.
Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.
Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.
Identification of the Federal Program: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Federal Award Identification Number: CA-2020-191; CA-2021-018; CA-2021-115; CA-2021-239; CA-2022-135; CA-2023-034 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: During our audit, we noted that 27 out of 40 timecards were not consistently reviewed and approved by supervisors or department heads prior to payroll processing. Additionally, Personnel Action Forms (PAFs) were not maintained for all employees, only full-time employees had PAFs on file, and several PAFs did not reflect current salary step information. These deficiencies led to instances where 4 employees were paid incorrect wages and subsequently had to be issued retroactive pay adjustments. Cause: The City did not adhere to its established policies and procedures for supervisory review and approval of timecards for all employees. Furthermore, there is no policy mandating the preparation and maintenance of PAFs for part-time or temporary employees, and no systematic process to update PAFs for salary changes or step increases. Effect or Potential Effect: Lack of appropriate review and documentation increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. In this case, 4 employees were underpaid due to inaccurate salary records and had to receive retroactive pay, resulting in potential risk of unallowable costs being charged to federal programs. Questioned Costs: None noted. Context: See condition above for the context of the payroll finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend the City enhance its internal controls over payroll processes to ensure that all timecards are reviewed and approved by the appropriate supervisor prior to processing. Additionally, PAFs should be prepared and maintained for all employees, regardless of employment status, and should be regularly updated to reflect salary step adjustments or other compensation changes. The City should also consider periodic internal reviews of payroll records to identify and correct discrepancies in a timely manner and ensure compliance with federal cost principles. Views of Responsible Officials: Management concurs with the finding and agrees to implement necessary corrective procedures.
Item 2024-004 - Activities Allowed or Unallowed, Allowable Costs/Cost Principles - U.S. Department of Health and Human Services, Unaccompanied Alien Children Program (Assistance Listing Number 93.676), FAIN # 90ZU0385, 90ZU0603, 90ZU0567, and 90ZU0536, for FY 2024 - Significant Deficiency Criteria In accordance with 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Statement of Condition During our audit, we noted that for one of the employees tested, the percentage of salary allocation per time and effort attestation form did not agree to the salary charged per the general ledger. Cause Inconsistent application of the internal control. Effect The deficiency in the Agency's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs None Context We selected 25 salary transactions charged to the federal program to test controls over compliance for allowable costs/activities allowed. Out of the 25 transactions tested, we noted one instance where the percentage allocation of salary per time and effort attestation form did not agree to the salary charged per the general ledger. Identification as a repeat finding This is not a repeat finding. Recommendation We recommend that the Agency strengthen their internal control policies and procedures to ensure that the allocations per the time and effort attestation forms agree with the amount charged to the grant per the general ledger. Management response We acknowledge the recommendation and recognize the importance of aligning time and effort attestations with the amounts charged to grants in the general ledger. We ensure that any changes to employee allocations are reflected timely in our payroll and accounting systems to maintain consistency between documentation and financial records. Additionally, we are reviewing our internal controls and procedures to identify any process gaps and reinforce communication between HR, Payroll, and Finance teams. Going forward, we will enhance oversight to ensure that updates related to employee funding sources are promptly recorded, which will help maintain accurate grant reporting and compliance with applicable regulations.
#2024‐002 – Significant Deficiency – Activities Allowed or Unallowed, Allowable Costs/Cost Principles Opioid STR Grant ALN 93.788 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, “Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.” Condition During the course of the audit, we noted there was no documented review and approval of employee timesheets or the allocation methodology used to allocate salaries to the federal awards. Cause The Organization has made a reasonable effort to design proper controls, but has faced challenges in implementing them effectively, due to growth across multiple locations and frequent turnover. Effect The potential effects of not documenting the review and approval of the payroll allocation methodology could include an over or understatement of salary expenses allocated to the federal grants. A lack of proper approval of employee timesheets could result in ghost employees on the Organization’s payroll or overpayment of hours and rates. Questioned Costs None Perspective Information The finding noted related to eighteen (18) employees whose time that was allocated between multiple programs based on test work performed for four (4) pay periods. Approval of employee timesheets was noted for payroll subsequent to May 15th, 2024, however, similar review and approval of the payroll allocation methodology was not noted subsequent to May 15th, 2024. Identification as a repeat finding A similar issue was noted in prior year findings #2023‐001 and #2023‐002. Recommendation We recommend having written documentation of the review and approval of the payroll allocation methodology on file, along with documentation of approval to support any modifications to this methodology occurring throughout the year. We recommend having documented review and approval of employee timesheets and biweekly payrolls by the appropriate supervisor/management. View of Responsible Official (This was implemented at the end of the 22/23 Audit, however, that audit was completed after the beginning of the next fiscal year. Therefore, the timing overlapped, and the changes implemented were not yet evident at the beginning of the new fiscal year.) Currently, based on the capacity of the Organization’s staffing pool, the most efficient and effective means of review and reconciliation of cash disbursements and payroll is the Organization’s Board Chair and CEO reviewing the cash disbursements and payroll every two weeks, prior to payments being made. The Organization’s Director of Operations forwards the Board Chair and CEO a listing of cash disbursements and payroll due with the suggested payments. The Board Chair and CEO each will ask questions and formally “approve” or “disapprove” each transaction, prior to any disbursements. Once reviewed, the CEO will return the reviewed materials to the Director of Operations with the amounts to pay. Also, the Organization’s outsourced accountant will review and approve each monthly bank reconciliation and bank statement for all Organizational accounts, as well as the monthly credit card statements. The outsourced accountant does not have the ability to access the monthly bank statements or make purchases.
#2024‐002 – Significant Deficiency – Activities Allowed or Unallowed, Allowable Costs/Cost Principles Opioid STR Grant ALN 93.788 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, “Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.” Condition During the course of the audit, we noted there was no documented review and approval of employee timesheets or the allocation methodology used to allocate salaries to the federal awards. Cause The Organization has made a reasonable effort to design proper controls, but has faced challenges in implementing them effectively, due to growth across multiple locations and frequent turnover. Effect The potential effects of not documenting the review and approval of the payroll allocation methodology could include an over or understatement of salary expenses allocated to the federal grants. A lack of proper approval of employee timesheets could result in ghost employees on the Organization’s payroll or overpayment of hours and rates. Questioned Costs None Perspective Information The finding noted related to eighteen (18) employees whose time that was allocated between multiple programs based on test work performed for four (4) pay periods. Approval of employee timesheets was noted for payroll subsequent to May 15th, 2024, however, similar review and approval of the payroll allocation methodology was not noted subsequent to May 15th, 2024. Identification as a repeat finding A similar issue was noted in prior year findings #2023‐001 and #2023‐002. Recommendation We recommend having written documentation of the review and approval of the payroll allocation methodology on file, along with documentation of approval to support any modifications to this methodology occurring throughout the year. We recommend having documented review and approval of employee timesheets and biweekly payrolls by the appropriate supervisor/management. View of Responsible Official (This was implemented at the end of the 22/23 Audit, however, that audit was completed after the beginning of the next fiscal year. Therefore, the timing overlapped, and the changes implemented were not yet evident at the beginning of the new fiscal year.) Currently, based on the capacity of the Organization’s staffing pool, the most efficient and effective means of review and reconciliation of cash disbursements and payroll is the Organization’s Board Chair and CEO reviewing the cash disbursements and payroll every two weeks, prior to payments being made. The Organization’s Director of Operations forwards the Board Chair and CEO a listing of cash disbursements and payroll due with the suggested payments. The Board Chair and CEO each will ask questions and formally “approve” or “disapprove” each transaction, prior to any disbursements. Once reviewed, the CEO will return the reviewed materials to the Director of Operations with the amounts to pay. Also, the Organization’s outsourced accountant will review and approve each monthly bank reconciliation and bank statement for all Organizational accounts, as well as the monthly credit card statements. The outsourced accountant does not have the ability to access the monthly bank statements or make purchases.