Finding 2023-002: Special Education Cluster Semi-Annual Certification Procedures U.S. Department of Education Pass-through agency: Michigan Department of Education Assistance Listing Numbers: 84.027A, 84.027X, 84.173A and 84.173X Award numbers: 220450 21-22, 230493 22-23, 230450 22-23, COVID-19 221280 21-22, 220460 21-22, 230460 22-23 and COVID-19 221285 21-22 Award year ends: June 30, 2023, September 30, 2023 and September 30, 2024 Specific Requirement: Allowable Costs/Cost Principles Criteria: Section 200.430 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations (CFR) Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires charges to federal award for salaries and wages to be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal controls which provide reasonable assurance that charges are accurate, allowable and properly allocated, (2) reasonably reflect total activity for which the employee is compensated, (3) encompass both federally assisted and all other activities compensated by the entity, (4) support the distribution of the employee’s wages among specific cost objectives if the employee works on more than one federal award, (5) be reconciled with payroll budget estimates with necessary adjustments made to accounting records to ensure that excess costs are not charged to federal programs. Appendix B to 2 CFR, Part 225—Selected Items of Cost indicates that where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on that program for the period covered by the certification. These certifications will be prepared at least semi-annually and will be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. Questioned Costs: None. Condition: During our detailed testing of time-and-effort reporting for the Special Education Cluster programs, we noted that semi-annual certifications were prepared to comply with federal time and effort requirements. However, the reports were not timely prepared or timely reviewed by the program supervisors with documented approval. Context: Eighteen employees working in the federal program were eligible for semi-annual certifications because their payroll costs were fully allocated to a single federal program or cost objective. Separate semi-annual certifications were prepared for each eligible employee for each six-month period during the fiscal year. While all certifications contained the proper components, including documented supervisor approval, they were not prepared timely as the forms for fourteen employees were completed and certified at least two-and-a-half or three-and-a-half months after the six-month period ending dates. Additionally, both semi-annual certifications for four employees were approved during the audit process. The sample was not a statistically valid sample. Effect: Failure to timely and properly prepare and review time-and-effort reporting could allow improper payroll expenses to be charged to the School District’s federal programs. As a result, payroll compensation and fringe benefits charged for these employees could be disallowed, or there could be missed opportunities for reimbursement. Cause: The School District program personnel did not timely review and approve the federal requirements for time-and-effort reporting semi-annual certifications. As a result, semi-annual certifications were not reviewed and approved for these employees during the required timeframes. Repeat Finding: This is not a repeat finding. Recommendation: The School District should provide training to educate all employees working in federal programs of the requirements for documenting personnel expenses under Uniform Grant Guidance, and the School District should require proper time-and-effort documentation to be timely reviewed and approved by the appropriate program supervisor. Views of Responsible Officials: The School District agrees with this finding.
Finding 2023-002: Salaries and Wages (Allowable Costs) Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.600 Criteria: According to 2 CFR Section 200.430(i), charges to federal grants for salaries and wages must be based on records that accurately reflect the work performed and the 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; vi. [Reserved] vii. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. viii. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition: Educare allocates time to federal grants based on estimates made by management that are adjusted throughout the year. Cause: For several years, most of Educare's employees charged 100% of their time to one federal program. However, in recent years, the number of employees who charged 100% of their time to one federal program has decreased while the number of employees who charged time to multiple programs has increased. While Educare uses timesheets, salaries were not allocated to federal programs based on actual time spent per timesheets. Instead, Educare performed an after the fact reconciliation of time spent to the estimates used, but the reconciliation was not documented and incorporated into Educare's official records. Effect or Potential Effect: The possibility exists that salaries and wages charged to federal grants were not supported by documented evidence in accordance with the Uniform Guidance. Questioned Costs: None. Context: All of the salaries and wages selected for testing were determined by management based on estimates of time spent that were adjusted throughout the year. Documentary evidence of the reconciliation between the estimates and actual effort was not maintained in Educare's official records. Identification as a Repeat Finding: Not applicable. Recommendation: While the amount of time that was charged to each program may have been materially correct, documentary evidence of the reconciliation between the estimates and actual effort was not maintained by Educare. We recommend that Educare maintain documentation of its allocation process to support time charged to its federal programs. The allocation process can be supported by either timesheets or after the fact effort reports from employees which are reconciled to the estimates used to allocate salaries and wages to programs, including federal programs.
Finding 2023-002: Salaries and Wages (Allowable Costs) Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.600 Criteria: According to 2 CFR Section 200.430(i), charges to federal grants for salaries and wages must be based on records that accurately reflect the work performed and the 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; vi. [Reserved] vii. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. viii. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition: Educare allocates time to federal grants based on estimates made by management that are adjusted throughout the year. Cause: For several years, most of Educare's employees charged 100% of their time to one federal program. However, in recent years, the number of employees who charged 100% of their time to one federal program has decreased while the number of employees who charged time to multiple programs has increased. While Educare uses timesheets, salaries were not allocated to federal programs based on actual time spent per timesheets. Instead, Educare performed an after the fact reconciliation of time spent to the estimates used, but the reconciliation was not documented and incorporated into Educare's official records. Effect or Potential Effect: The possibility exists that salaries and wages charged to federal grants were not supported by documented evidence in accordance with the Uniform Guidance. Questioned Costs: None. Context: All of the salaries and wages selected for testing were determined by management based on estimates of time spent that were adjusted throughout the year. Documentary evidence of the reconciliation between the estimates and actual effort was not maintained in Educare's official records. Identification as a Repeat Finding: Not applicable. Recommendation: While the amount of time that was charged to each program may have been materially correct, documentary evidence of the reconciliation between the estimates and actual effort was not maintained by Educare. We recommend that Educare maintain documentation of its allocation process to support time charged to its federal programs. The allocation process can be supported by either timesheets or after the fact effort reports from employees which are reconciled to the estimates used to allocate salaries and wages to programs, including federal programs.
Finding 2023-002: Salaries and Wages (Allowable Costs) Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.600 Criteria: According to 2 CFR Section 200.430(i), charges to federal grants for salaries and wages must be based on records that accurately reflect the work performed and the 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; vi. [Reserved] vii. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. viii. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition: Educare allocates time to federal grants based on estimates made by management that are adjusted throughout the year. Cause: For several years, most of Educare's employees charged 100% of their time to one federal program. However, in recent years, the number of employees who charged 100% of their time to one federal program has decreased while the number of employees who charged time to multiple programs has increased. While Educare uses timesheets, salaries were not allocated to federal programs based on actual time spent per timesheets. Instead, Educare performed an after the fact reconciliation of time spent to the estimates used, but the reconciliation was not documented and incorporated into Educare's official records. Effect or Potential Effect: The possibility exists that salaries and wages charged to federal grants were not supported by documented evidence in accordance with the Uniform Guidance. Questioned Costs: None. Context: All of the salaries and wages selected for testing were determined by management based on estimates of time spent that were adjusted throughout the year. Documentary evidence of the reconciliation between the estimates and actual effort was not maintained in Educare's official records. Identification as a Repeat Finding: Not applicable. Recommendation: While the amount of time that was charged to each program may have been materially correct, documentary evidence of the reconciliation between the estimates and actual effort was not maintained by Educare. We recommend that Educare maintain documentation of its allocation process to support time charged to its federal programs. The allocation process can be supported by either timesheets or after the fact effort reports from employees which are reconciled to the estimates used to allocate salaries and wages to programs, including federal programs.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (1) “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (1) “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (1) “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (1) “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (1) “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (1) “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (1) “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (1) “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Semi-annual time and effort certifications were not maintained for a grant employee whose salaries and wages were not supported by detailed time records. Cause: Turnover in the school payroll position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $35,350.88 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Views of Responsible Official: Management agrees with the finding.
U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Semi-annual time and effort certifications were not maintained for a grant employee whose salaries and wages were not supported by detailed time records. Cause: Turnover in the school payroll position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $35,350.88 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Views of Responsible Official: Management agrees with the finding.
U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Semi-annual time and effort certifications were not maintained for a grant employee whose salaries and wages were not supported by detailed time records. Cause: Turnover in the school payroll position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $35,350.88 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Views of Responsible Official: Management agrees with the finding.
U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Semi-annual time and effort certifications were not maintained for a grant employee whose salaries and wages were not supported by detailed time records. Cause: Turnover in the school payroll position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $35,350.88 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Views of Responsible Official: Management agrees with the finding.
U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Semi-annual time and effort certifications were not maintained for a grant employee whose salaries and wages were not supported by detailed time records. Cause: Turnover in the school payroll position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $35,350.88 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Views of Responsible Official: Management agrees with the finding.
U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Semi-annual time and effort certifications were not maintained for a grant employee whose salaries and wages were not supported by detailed time records. Cause: Turnover in the school payroll position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $35,350.88 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Views of Responsible Official: Management agrees with the finding.
of Agriculture, Passed through Minnesota Department of Education Federal Financial Assistance Listing/CFDA Number 10.553/10.555 Child Nutrition Cluster Activities Allowed or Unallowed; Allowable Costs and Cost Principles Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria – A good system of internal control includes an adequate system for ensuring all expenditures are properly recorded and allowable under the related federal grant in accordance with 2 CFR 200.430(i). Condition – During the course of our engagement, we noted ten instances where documentation of changes to contract wage rates or evidence of approved timesheets were not maintained. Cause – The District does not have an internal control system designed to review and maintain documentation for expenditures, including payroll transactions. Effect – A lack of internal controls over allowable costs and activities could result in improper use of federal funds and non‐compliance with the provisions of applicable grant requirements. Questioned Costs – $8,419 Context/Sampling – A non‐statistical sample of 60 transactions out of 2,215 total transactions were selected for testing, which accounted for $35,327 of $525,590 of federal program expenditures. Repeat Finding from Prior Year(s) – Yes, 2022‐004 Recommendation – The District should review internal control procedures to ensure federal expenditures are being properly reviewed for unallowable costs and activities. Supporting documentation should then be maintained once the review is documented and performed. Views of Responsible Officials – There is no disagreement with the audit finding.
of Agriculture, Passed through Minnesota Department of Education Federal Financial Assistance Listing/CFDA Number 10.553/10.555 Child Nutrition Cluster Activities Allowed or Unallowed; Allowable Costs and Cost Principles Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria – A good system of internal control includes an adequate system for ensuring all expenditures are properly recorded and allowable under the related federal grant in accordance with 2 CFR 200.430(i). Condition – During the course of our engagement, we noted ten instances where documentation of changes to contract wage rates or evidence of approved timesheets were not maintained. Cause – The District does not have an internal control system designed to review and maintain documentation for expenditures, including payroll transactions. Effect – A lack of internal controls over allowable costs and activities could result in improper use of federal funds and non‐compliance with the provisions of applicable grant requirements. Questioned Costs – $8,419 Context/Sampling – A non‐statistical sample of 60 transactions out of 2,215 total transactions were selected for testing, which accounted for $35,327 of $525,590 of federal program expenditures. Repeat Finding from Prior Year(s) – Yes, 2022‐004 Recommendation – The District should review internal control procedures to ensure federal expenditures are being properly reviewed for unallowable costs and activities. Supporting documentation should then be maintained once the review is documented and performed. Views of Responsible Officials – There is no disagreement with the audit finding.
of Agriculture, Passed through Minnesota Department of Education Federal Financial Assistance Listing/CFDA Number 10.553/10.555 Child Nutrition Cluster Activities Allowed or Unallowed; Allowable Costs and Cost Principles Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria – A good system of internal control includes an adequate system for ensuring all expenditures are properly recorded and allowable under the related federal grant in accordance with 2 CFR 200.430(i). Condition – During the course of our engagement, we noted ten instances where documentation of changes to contract wage rates or evidence of approved timesheets were not maintained. Cause – The District does not have an internal control system designed to review and maintain documentation for expenditures, including payroll transactions. Effect – A lack of internal controls over allowable costs and activities could result in improper use of federal funds and non‐compliance with the provisions of applicable grant requirements. Questioned Costs – $8,419 Context/Sampling – A non‐statistical sample of 60 transactions out of 2,215 total transactions were selected for testing, which accounted for $35,327 of $525,590 of federal program expenditures. Repeat Finding from Prior Year(s) – Yes, 2022‐004 Recommendation – The District should review internal control procedures to ensure federal expenditures are being properly reviewed for unallowable costs and activities. Supporting documentation should then be maintained once the review is documented and performed. Views of Responsible Officials – There is no disagreement with the audit finding.
of Agriculture, Passed through Minnesota Department of Education Federal Financial Assistance Listing/CFDA Number 10.553/10.555 Child Nutrition Cluster Activities Allowed or Unallowed; Allowable Costs and Cost Principles Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria – A good system of internal control includes an adequate system for ensuring all expenditures are properly recorded and allowable under the related federal grant in accordance with 2 CFR 200.430(i). Condition – During the course of our engagement, we noted ten instances where documentation of changes to contract wage rates or evidence of approved timesheets were not maintained. Cause – The District does not have an internal control system designed to review and maintain documentation for expenditures, including payroll transactions. Effect – A lack of internal controls over allowable costs and activities could result in improper use of federal funds and non‐compliance with the provisions of applicable grant requirements. Questioned Costs – $8,419 Context/Sampling – A non‐statistical sample of 60 transactions out of 2,215 total transactions were selected for testing, which accounted for $35,327 of $525,590 of federal program expenditures. Repeat Finding from Prior Year(s) – Yes, 2022‐004 Recommendation – The District should review internal control procedures to ensure federal expenditures are being properly reviewed for unallowable costs and activities. Supporting documentation should then be maintained once the review is documented and performed. Views of Responsible Officials – There is no disagreement with the audit finding.
FINDING 2023-001 TIME AND EFFORT RECORDS SIGNIFICANT DEFICIENCY Federal Program: Education Stabilization Fund Assistance Listing Numbers: 84.425D and 84.425U Condition: The School applied employee salary expenses to the program. While employees were applied to the grant in line with the approved budget, proper time and effort records were not maintained. Semiannual certification forms did not reflect a six-month period and were not signed at the end of the sixmonth period. Criteria: Charges for Federal awards for salaries and wages must be based on records that accurately reflect work performed (2 CFR 200.430(i)). Cause The School was not aware of the requirement outlined in the Criteria section above. Effect: The School is unable to document certification of employee time spent in the program. Recommendation: We recommend the School develop internal controls to ensure that proper semi-annual certifications are maintained. Views of Responsible Officials and Planned Corrective Actions The School’s Corrective Action Plan is included on pages 26 to 27.
FINDING 2023-001 TIME AND EFFORT RECORDS SIGNIFICANT DEFICIENCY Federal Program: Education Stabilization Fund Assistance Listing Numbers: 84.425D and 84.425U Condition: The School applied employee salary expenses to the program. While employees were applied to the grant in line with the approved budget, proper time and effort records were not maintained. Semiannual certification forms did not reflect a six-month period and were not signed at the end of the sixmonth period. Criteria: Charges for Federal awards for salaries and wages must be based on records that accurately reflect work performed (2 CFR 200.430(i)). Cause The School was not aware of the requirement outlined in the Criteria section above. Effect: The School is unable to document certification of employee time spent in the program. Recommendation: We recommend the School develop internal controls to ensure that proper semi-annual certifications are maintained. Views of Responsible Officials and Planned Corrective Actions The School’s Corrective Action Plan is included on pages 26 to 27.
FINDING 2023-005 Federal Program Information: Research and Development Cluster (ALN: Various), The National COVID-19 Resiliency Network: Mitigating the Impact of COVID-19 on Vulnerable Populations (ALN: 93.137), Community‐Based Workforce to Build COVID‐19 Vaccine Confidence (ALN: 93.011) and Education Stabilization Fund Higher Education Emergency Relief Fund (ALN: 84.425E, 84.425J) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation) B. Allowable Cost/Cost Principles - Federal grant requirements, § 200.430, provide that salaries and wages charged to federal awards must be based on records that accurately reflect the work performed; 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 institution; reasonably reflect the total activity for which the employee is compensated; 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. Condition: During our testing of expenditures, we noted the following exceptions: • For 7 of 100 selected employees, level of effort certifications were not available to support the payroll costs charged to the federal program. Cause: Lack of administrative oversight with respect to allowable cost/cost principles compliance requirements. Effect or Potential Effect: The School does not have policies and procedures in place to ensure that compliance is maintained with respect to supporting payroll costs charged to the federal programs. Questioned Costs: Indeterminable. Context: We tested a sample of 100 expenditures across four major programs and noted 4 exceptions as noted in the condition. This is a condition identified per review of the School’s compliance with specified requirements using a statistically valid sample. Identification as a Repeat Finding: No similar finding was identified during the prior year. Recommendation: We recommend that the School adhere to its policies and procedures over the applicable compliance requirements of allowable costs/cost principles requirements to ensure that the School is appropriately monitoring level of effort reporting in a timely manner. Views of Responsible Officials and Planned Corrective Actions: We experienced a system glitch resulting in records that remained in validation tables and did not move to the process reporting tables which prevented proper reporting of work hours performed. The system did not generate the required certification reports to allow the selected employee to certify their effort. We are reviewing our processes to implement an automated comparison reports of individual employees paid from federal grants and the system generated effort certification report to ensure that the system generates the required effort report to allow the employee to properly certify their effort. We will also ensure that all employees approve/certify actual time worked allotted to federal funds within our time and attendance system to provide another level of certification. This report will be produced quarterly to ensure that system errors are corrected before the required semiannual effort reporting requirement.
FINDING 2023-005 Federal Program Information: Research and Development Cluster (ALN: Various), The National COVID-19 Resiliency Network: Mitigating the Impact of COVID-19 on Vulnerable Populations (ALN: 93.137), Community‐Based Workforce to Build COVID‐19 Vaccine Confidence (ALN: 93.011) and Education Stabilization Fund Higher Education Emergency Relief Fund (ALN: 84.425E, 84.425J) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation) B. Allowable Cost/Cost Principles - Federal grant requirements, § 200.430, provide that salaries and wages charged to federal awards must be based on records that accurately reflect the work performed; 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 institution; reasonably reflect the total activity for which the employee is compensated; 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. Condition: During our testing of expenditures, we noted the following exceptions: • For 7 of 100 selected employees, level of effort certifications were not available to support the payroll costs charged to the federal program. Cause: Lack of administrative oversight with respect to allowable cost/cost principles compliance requirements. Effect or Potential Effect: The School does not have policies and procedures in place to ensure that compliance is maintained with respect to supporting payroll costs charged to the federal programs. Questioned Costs: Indeterminable. Context: We tested a sample of 100 expenditures across four major programs and noted 4 exceptions as noted in the condition. This is a condition identified per review of the School’s compliance with specified requirements using a statistically valid sample. Identification as a Repeat Finding: No similar finding was identified during the prior year. Recommendation: We recommend that the School adhere to its policies and procedures over the applicable compliance requirements of allowable costs/cost principles requirements to ensure that the School is appropriately monitoring level of effort reporting in a timely manner. Views of Responsible Officials and Planned Corrective Actions: We experienced a system glitch resulting in records that remained in validation tables and did not move to the process reporting tables which prevented proper reporting of work hours performed. The system did not generate the required certification reports to allow the selected employee to certify their effort. We are reviewing our processes to implement an automated comparison reports of individual employees paid from federal grants and the system generated effort certification report to ensure that the system generates the required effort report to allow the employee to properly certify their effort. We will also ensure that all employees approve/certify actual time worked allotted to federal funds within our time and attendance system to provide another level of certification. This report will be produced quarterly to ensure that system errors are corrected before the required semiannual effort reporting requirement.
FINDING 2023-005 Federal Program Information: Research and Development Cluster (ALN: Various), The National COVID-19 Resiliency Network: Mitigating the Impact of COVID-19 on Vulnerable Populations (ALN: 93.137), Community‐Based Workforce to Build COVID‐19 Vaccine Confidence (ALN: 93.011) and Education Stabilization Fund Higher Education Emergency Relief Fund (ALN: 84.425E, 84.425J) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation) B. Allowable Cost/Cost Principles - Federal grant requirements, § 200.430, provide that salaries and wages charged to federal awards must be based on records that accurately reflect the work performed; 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 institution; reasonably reflect the total activity for which the employee is compensated; 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. Condition: During our testing of expenditures, we noted the following exceptions: • For 7 of 100 selected employees, level of effort certifications were not available to support the payroll costs charged to the federal program. Cause: Lack of administrative oversight with respect to allowable cost/cost principles compliance requirements. Effect or Potential Effect: The School does not have policies and procedures in place to ensure that compliance is maintained with respect to supporting payroll costs charged to the federal programs. Questioned Costs: Indeterminable. Context: We tested a sample of 100 expenditures across four major programs and noted 4 exceptions as noted in the condition. This is a condition identified per review of the School’s compliance with specified requirements using a statistically valid sample. Identification as a Repeat Finding: No similar finding was identified during the prior year. Recommendation: We recommend that the School adhere to its policies and procedures over the applicable compliance requirements of allowable costs/cost principles requirements to ensure that the School is appropriately monitoring level of effort reporting in a timely manner. Views of Responsible Officials and Planned Corrective Actions: We experienced a system glitch resulting in records that remained in validation tables and did not move to the process reporting tables which prevented proper reporting of work hours performed. The system did not generate the required certification reports to allow the selected employee to certify their effort. We are reviewing our processes to implement an automated comparison reports of individual employees paid from federal grants and the system generated effort certification report to ensure that the system generates the required effort report to allow the employee to properly certify their effort. We will also ensure that all employees approve/certify actual time worked allotted to federal funds within our time and attendance system to provide another level of certification. This report will be produced quarterly to ensure that system errors are corrected before the required semiannual effort reporting requirement.
FINDING 2023-005 Federal Program Information: Research and Development Cluster (ALN: Various), The National COVID-19 Resiliency Network: Mitigating the Impact of COVID-19 on Vulnerable Populations (ALN: 93.137), Community‐Based Workforce to Build COVID‐19 Vaccine Confidence (ALN: 93.011) and Education Stabilization Fund Higher Education Emergency Relief Fund (ALN: 84.425E, 84.425J) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation) B. Allowable Cost/Cost Principles - Federal grant requirements, § 200.430, provide that salaries and wages charged to federal awards must be based on records that accurately reflect the work performed; 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 institution; reasonably reflect the total activity for which the employee is compensated; 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. Condition: During our testing of expenditures, we noted the following exceptions: • For 7 of 100 selected employees, level of effort certifications were not available to support the payroll costs charged to the federal program. Cause: Lack of administrative oversight with respect to allowable cost/cost principles compliance requirements. Effect or Potential Effect: The School does not have policies and procedures in place to ensure that compliance is maintained with respect to supporting payroll costs charged to the federal programs. Questioned Costs: Indeterminable. Context: We tested a sample of 100 expenditures across four major programs and noted 4 exceptions as noted in the condition. This is a condition identified per review of the School’s compliance with specified requirements using a statistically valid sample. Identification as a Repeat Finding: No similar finding was identified during the prior year. Recommendation: We recommend that the School adhere to its policies and procedures over the applicable compliance requirements of allowable costs/cost principles requirements to ensure that the School is appropriately monitoring level of effort reporting in a timely manner. Views of Responsible Officials and Planned Corrective Actions: We experienced a system glitch resulting in records that remained in validation tables and did not move to the process reporting tables which prevented proper reporting of work hours performed. The system did not generate the required certification reports to allow the selected employee to certify their effort. We are reviewing our processes to implement an automated comparison reports of individual employees paid from federal grants and the system generated effort certification report to ensure that the system generates the required effort report to allow the employee to properly certify their effort. We will also ensure that all employees approve/certify actual time worked allotted to federal funds within our time and attendance system to provide another level of certification. This report will be produced quarterly to ensure that system errors are corrected before the required semiannual effort reporting requirement.
2023-003 Allowable Costs US Department of Education Passed Through NYS Education Dept Education Stabilization Fund COVID 19 ARP Summer Learning Criteria: According to 2 CFR section 200.430.(i) the District must maintain the records it generally maintains for salaries and wages expended. Condition: The District expended funds from ARP Summer Learning grant to pay for salaries and wages. In our sample of payroll disbursements, we found an instance where we were unable to verify a timesheet and the supporting approval of a disbursement. Context: The audit identified disbursements that were not supported by documentation and approval. Effect: If payroll disbursements are not supported by documentation and approval, they may not be properly safeguarded, and the District may not comply with the federal allowable costs rules. Cause: Unknown. Recommendation: We recommend that the District develop a system to make sure that proper approved timesheets are obtained in a timely manner and maintained. Management’s response: See attached.
Finding Number 2023-006 Assistance Listing Number 84.425 - Education Stabilization Fund Allowable Costs/Cost Principles - Documentation of Employee Time and Effort Material Weakness in Internal Control over Compliance Material Noncompliance Criteria: Per Federal regulations CFR Title 2, Part 200 Section 200.430 (i)(1), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: The School District did not maintain time and effort distribution records for two employees whose salaries, wages and benefits were charged to the federal award program. Cause: Accounting department turnover lead to incomplete record keeping and lack of knowledge on the federal requirement requiring accounting records to support salary, wage and benefit allocations. Effect: As a result of this condition, salaries, wages and benefits may be charged to the federal award program that are not supported by time and effort distributions. Questioned Costs: Known questioned costs are $77,244, and likely questioned costs are $130,610. Context: This finding relates to two employees whose salary, wages and benefits are charged 100% to this federal award program, however, the School District simply did not obtain an after-the-fact determination of their time and effort in accordance with the federal requirements. Recommendation: Salaries, wages and benefits allocations must be supported by time and effort documentation. This can be accomplished by obtaining semi-annual certifications, personal activity reports or weekly timecards from employees. We recommend management review employee allocations to ensure an after-the-fact determination of actual time spent is obtained from all employees charged to federal award programs.
Finding Number 2023-006 Assistance Listing Number 84.425 - Education Stabilization Fund Allowable Costs/Cost Principles - Documentation of Employee Time and Effort Material Weakness in Internal Control over Compliance Material Noncompliance Criteria: Per Federal regulations CFR Title 2, Part 200 Section 200.430 (i)(1), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: The School District did not maintain time and effort distribution records for two employees whose salaries, wages and benefits were charged to the federal award program. Cause: Accounting department turnover lead to incomplete record keeping and lack of knowledge on the federal requirement requiring accounting records to support salary, wage and benefit allocations. Effect: As a result of this condition, salaries, wages and benefits may be charged to the federal award program that are not supported by time and effort distributions. Questioned Costs: Known questioned costs are $77,244, and likely questioned costs are $130,610. Context: This finding relates to two employees whose salary, wages and benefits are charged 100% to this federal award program, however, the School District simply did not obtain an after-the-fact determination of their time and effort in accordance with the federal requirements. Recommendation: Salaries, wages and benefits allocations must be supported by time and effort documentation. This can be accomplished by obtaining semi-annual certifications, personal activity reports or weekly timecards from employees. We recommend management review employee allocations to ensure an after-the-fact determination of actual time spent is obtained from all employees charged to federal award programs.
Finding Number 2023-006 Assistance Listing Number 84.425 - Education Stabilization Fund Allowable Costs/Cost Principles - Documentation of Employee Time and Effort Material Weakness in Internal Control over Compliance Material Noncompliance Criteria: Per Federal regulations CFR Title 2, Part 200 Section 200.430 (i)(1), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: The School District did not maintain time and effort distribution records for two employees whose salaries, wages and benefits were charged to the federal award program. Cause: Accounting department turnover lead to incomplete record keeping and lack of knowledge on the federal requirement requiring accounting records to support salary, wage and benefit allocations. Effect: As a result of this condition, salaries, wages and benefits may be charged to the federal award program that are not supported by time and effort distributions. Questioned Costs: Known questioned costs are $77,244, and likely questioned costs are $130,610. Context: This finding relates to two employees whose salary, wages and benefits are charged 100% to this federal award program, however, the School District simply did not obtain an after-the-fact determination of their time and effort in accordance with the federal requirements. Recommendation: Salaries, wages and benefits allocations must be supported by time and effort documentation. This can be accomplished by obtaining semi-annual certifications, personal activity reports or weekly timecards from employees. We recommend management review employee allocations to ensure an after-the-fact determination of actual time spent is obtained from all employees charged to federal award programs.
2023-002 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Material Weakness in Internal Controls over Compliance and Material Noncompliance Department of Education Federal Assistance Listing Number: 84.031 Federal Program Name: Higher Education Institutional Aid Federal Award Number: P031S210057, P031S170020, P031C210038 Award Year: 2022-23, 2021-22 Criteria – Compensation costs are allowable to the extent they satisfy requirements of 2 CFR section 200.430, and the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including charges to Federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition/context – A sample of 17 employees out of a population of 32 employees whose compensation was charged to the awards was selected. Of the 17 samples selected we found 10 employees who either had no records to support the actual allocation of time that was charged to each award or the amount allocated to the award did not agree to the time and effort reporting. The personnel action form that is completed upon hire indicated the allocation of time worked in some instances, however in accordance with 2 CFR section 200.430 (i)(1)(viii) estimates determined before the services are performed do not qualify as support for charges to Federal awards. Our sample was not, and was not intended to be, statistically valid. Questioned costs – Undeterminable Cause/effect – The University does not have the proper controls in place to ensure time and effort reporting is completed or completed accurately. The lack of records supporting the actual allocation of time charged increases the risk of unallowable compensation costs being charged to the federal award. Repeat finding – Yes, 2022-002 Recommendation – We recommend the University implement an internal control policy that requires employees whose compensation is charged to a federal award complete time and effort reporting to accurately reflect the work performed on each federal award and ensure supporting documentation is maintained for those who do charge time and agrees to amount allocated to the award. Views of responsible officials and planned corrective actions – Heritage University will implement a new internal control policy that requires employees whose compensation is charged to federal awards to complete time and effort to accurately reflect the work performed on each federal award. Heritage University is using the time and effort forms to allocate the correct hours to each federal award during the payroll process period. Each pay period an employee must fill out the time and effort to show actual hours worked. The form is signed by the employee and supervisor before turning it in to the payroll department. An email will be sent out to all employees outlining the new process required by employees whose hours are charged to a federal award.
2023-002 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Material Weakness in Internal Controls over Compliance and Material Noncompliance Department of Education Federal Assistance Listing Number: 84.031 Federal Program Name: Higher Education Institutional Aid Federal Award Number: P031S210057, P031S170020, P031C210038 Award Year: 2022-23, 2021-22 Criteria – Compensation costs are allowable to the extent they satisfy requirements of 2 CFR section 200.430, and the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including charges to Federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition/context – A sample of 17 employees out of a population of 32 employees whose compensation was charged to the awards was selected. Of the 17 samples selected we found 10 employees who either had no records to support the actual allocation of time that was charged to each award or the amount allocated to the award did not agree to the time and effort reporting. The personnel action form that is completed upon hire indicated the allocation of time worked in some instances, however in accordance with 2 CFR section 200.430 (i)(1)(viii) estimates determined before the services are performed do not qualify as support for charges to Federal awards. Our sample was not, and was not intended to be, statistically valid. Questioned costs – Undeterminable Cause/effect – The University does not have the proper controls in place to ensure time and effort reporting is completed or completed accurately. The lack of records supporting the actual allocation of time charged increases the risk of unallowable compensation costs being charged to the federal award. Repeat finding – Yes, 2022-002 Recommendation – We recommend the University implement an internal control policy that requires employees whose compensation is charged to a federal award complete time and effort reporting to accurately reflect the work performed on each federal award and ensure supporting documentation is maintained for those who do charge time and agrees to amount allocated to the award. Views of responsible officials and planned corrective actions – Heritage University will implement a new internal control policy that requires employees whose compensation is charged to federal awards to complete time and effort to accurately reflect the work performed on each federal award. Heritage University is using the time and effort forms to allocate the correct hours to each federal award during the payroll process period. Each pay period an employee must fill out the time and effort to show actual hours worked. The form is signed by the employee and supervisor before turning it in to the payroll department. An email will be sent out to all employees outlining the new process required by employees whose hours are charged to a federal award.
2023-002 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Material Weakness in Internal Controls over Compliance and Material Noncompliance Department of Education Federal Assistance Listing Number: 84.031 Federal Program Name: Higher Education Institutional Aid Federal Award Number: P031S210057, P031S170020, P031C210038 Award Year: 2022-23, 2021-22 Criteria – Compensation costs are allowable to the extent they satisfy requirements of 2 CFR section 200.430, and the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including charges to Federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition/context – A sample of 17 employees out of a population of 32 employees whose compensation was charged to the awards was selected. Of the 17 samples selected we found 10 employees who either had no records to support the actual allocation of time that was charged to each award or the amount allocated to the award did not agree to the time and effort reporting. The personnel action form that is completed upon hire indicated the allocation of time worked in some instances, however in accordance with 2 CFR section 200.430 (i)(1)(viii) estimates determined before the services are performed do not qualify as support for charges to Federal awards. Our sample was not, and was not intended to be, statistically valid. Questioned costs – Undeterminable Cause/effect – The University does not have the proper controls in place to ensure time and effort reporting is completed or completed accurately. The lack of records supporting the actual allocation of time charged increases the risk of unallowable compensation costs being charged to the federal award. Repeat finding – Yes, 2022-002 Recommendation – We recommend the University implement an internal control policy that requires employees whose compensation is charged to a federal award complete time and effort reporting to accurately reflect the work performed on each federal award and ensure supporting documentation is maintained for those who do charge time and agrees to amount allocated to the award. Views of responsible officials and planned corrective actions – Heritage University will implement a new internal control policy that requires employees whose compensation is charged to federal awards to complete time and effort to accurately reflect the work performed on each federal award. Heritage University is using the time and effort forms to allocate the correct hours to each federal award during the payroll process period. Each pay period an employee must fill out the time and effort to show actual hours worked. The form is signed by the employee and supervisor before turning it in to the payroll department. An email will be sent out to all employees outlining the new process required by employees whose hours are charged to a federal award.
2023-001 State and Local Fiscal Recovery Funds – Compliance & Internal Control Criteria: In accordance with 2CFR 200.430(i), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges 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. Budget estimates alone to do not qualify as support for charges to Federal awards. Condition: The Trust allocates employee payroll to Federal awards using a budgeted allocation percentage that may not be reflective of the actual time worked by the employee on Federal and non-Federal activities. Budgeted estimates are not adjusted to actual time worked on Federal programs during the year. Cause: The Trust currently does not have a system to track the number of hours personnel work on various Federal or non-Federal programs. Effect: Payroll expenditures may not be reflective of actual time worked on Federal grants. Federal expenditures may be overstated or understated. Known Questioned Costs: unknown Likely Questioned Costs: unknown Recommendations: We recommend the Trust implement a time tracking system that requires employees to provide detail on the number of hours worked on Federal and non-Federal programs on their timesheets. The time tracking data should be utilized to charge payroll to Federal awards.
2023-001 State and Local Fiscal Recovery Funds – Compliance & Internal Control Criteria: In accordance with 2CFR 200.430(i), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges 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. Budget estimates alone to do not qualify as support for charges to Federal awards. Condition: The Trust allocates employee payroll to Federal awards using a budgeted allocation percentage that may not be reflective of the actual time worked by the employee on Federal and non-Federal activities. Budgeted estimates are not adjusted to actual time worked on Federal programs during the year. Cause: The Trust currently does not have a system to track the number of hours personnel work on various Federal or non-Federal programs. Effect: Payroll expenditures may not be reflective of actual time worked on Federal grants. Federal expenditures may be overstated or understated. Known Questioned Costs: unknown Likely Questioned Costs: unknown Recommendations: We recommend the Trust implement a time tracking system that requires employees to provide detail on the number of hours worked on Federal and non-Federal programs on their timesheets. The time tracking data should be utilized to charge payroll to Federal awards.
FINDINGS AND QUESTIONED COSTS-MAJOR FEDERAL AWARD PROGRAM AUDIT Finding 2023-001: Compliance finding - Payroll U.S. Dept. of Health and Human Services Comm. Of MA, Department of Public Health Immunization Coop Agreements (ALN# 93.268) Condition: Payroll expenses charged to certain programs are not supported by actual time spent, but instead are allocated based upon the program budgets. Employees for those programs do not track which programs are being worked on throughout the day. Time is tracked in general and then applied to each program, based on the budget worksheet. Criteria or specific requirement: § 200.430 Compensation-personal services - budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that the system for establishing the estimates produces reasonable approximations of the activity actually performed. Cause: Employees are not charged with tracking their time by individual program and allocation of their wages is done by budget estimates. Effect: Payroll expenses charged to programs based upon program budgets and potentially do not accurately reflect the time spent by Organization staff on each program - misstatement of payroll expenses. Recommendation: Use of a Semi-Annual Personnel Activity Certification Form for each employee funded by a federal program. Management Response: Management has engaged a third party vendor for a new time and attendance software that will allow all hours worked and related programs to be tracked accurately. A contract has been signed and the software is actively being implemented.
2023-002 Federal agency: U.S. Department of Justice Federal program title: Crime Victim Assistance Assistance Listing Number: 16.575 Pass-Through Agency: Minnesota Office of Justice Programs Type of Finding: - Material Weakness in Internal Control Over Compliance - Other Matters Criteria or specific requirement: CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.430 specifies that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Documentation of time and effort was not maintained for 1 out of 20 employees tested under the program to support the amounts charged to grants. In addition, none of the timesheets selected for testing had formal documentation of review or approval. Questioned Costs: $11,538 Context: We tested 66 timesheets for 20 different individuals who charged time to the grant during the period tested. Time and effort documentation was not maintained for 4 out of 66 timesheets selected for testing under the program, which related to one individual. None of the timesheets selected for testing had formal documentation of review or approval. Cause: Proper internal control processes and procedures were not in place to document personnel time charged to the grant. Effect: Program could be over or under billed if time and effort is not calculated correctly from employee certifications or supported by approved timesheets. Recommendation: We recommend that WON implement a process to complete time and effort certifications and reconcile those certifications to ensure the costs reported to the grantor are accurate. We recommend that all additional amounts paid contain documentation that they are properly authorized. We recommend that all employees have timesheets to support the hours worked and charged to the grant. These timesheets should be formally approved by a supervisor. Views of responsible officials: WON will ensure that all timesheets are completed and properly approved going forward to ensure that time and effort is documented.
Criteria: Employees that work solely on a single cost objective are not required to maintain records reflecting the distribution of the employee's salary and wages, including among the Federal programs included in the consolidation, if applicable. However, for employees that work on multiple cost objectives, an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to the Federal program or cost objective and each other program or cost objective supported by consolidated Federal funds or other revenue sources. Condition: The District paid an employee with Title I funds based on a percentage of the employee's tital wages. No time and effort distribution records were documented for the employee for the grant expenditures to be charged accordingly. Questioned Costs: N/A. Context: The District paid approximately $16,400 for salaries without the appropriate documentation. Total salaries paid with tehse grant funds was $804,716. Effect: The District was not in compliance with the federal requirement. Cause: The District was unaware of this requirement. Recommendation: We recommend that for employees that work on multiple cost objectives, the District maintain time and effort distribution records to support the amount of payroll expenditures charged to the grant. Management's Response: The District will begin completing the necessary time and effort distribution records.
Criteria: Employees that work solely on a single cost objective are not required to maintain records reflecting the distribution of the employee's salary and wages, including among the Federal programs included in the consolidation, if applicable. However, for employees that work on multiple cost objectives, an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to the Federal program or cost objective and each other program or cost objective supported by consolidated Federal funds or other revenue sources. Condition: The District paid an employee with Title I funds based on a percentage of the employee's tital wages. No time and effort distribution records were documented for the employee for the grant expenditures to be charged accordingly. Questioned Costs: N/A. Context: The District paid approximately $16,400 for salaries without the appropriate documentation. Total salaries paid with tehse grant funds was $804,716. Effect: The District was not in compliance with the federal requirement. Cause: The District was unaware of this requirement. Recommendation: We recommend that for employees that work on multiple cost objectives, the District maintain time and effort distribution records to support the amount of payroll expenditures charged to the grant. Management's Response: The District will begin completing the necessary time and effort distribution records.
Criteria: Employees that work solely on a single cost objective are not required to maintain records reflecting the distribution of the employee's salary and wages, including among the Federal programs included in the consolidation, if applicable. However, for employees that work on multiple cost objectives, an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to the Federal program or cost objective and each other program or cost objective supported by consolidated Federal funds or other revenue sources. Condition: The District paid an employee with Title I funds based on a percentage of the employee's tital wages. No time and effort distribution records were documented for the employee for the grant expenditures to be charged accordingly. Questioned Costs: N/A. Context: The District paid approximately $16,400 for salaries without the appropriate documentation. Total salaries paid with tehse grant funds was $804,716. Effect: The District was not in compliance with the federal requirement. Cause: The District was unaware of this requirement. Recommendation: We recommend that for employees that work on multiple cost objectives, the District maintain time and effort distribution records to support the amount of payroll expenditures charged to the grant. Management's Response: The District will begin completing the necessary time and effort distribution records.
Significant Deficiency 2023-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Education Stabilization Funds (ESF) COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing No. 84.425U Criteria: Salaries, wages and any other forms of compensation charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries, wages and other forms of compensation must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs), timesheets, or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District inadvertently charged resource officers payroll costs to a federal grant, however, it was determined that these payroll costs were not budgeted in the federal grant and should not have been charged to the federal grant. Cause: This was an oversight by the District as these costs were not budgeted in the federal grant form FS-10, and should not have been charged to the federal grant. These payroll costs should have been charged to the general fund, however, this was not captured as part of the review for the reimbursement of expenditures for the federal grant. As described in Subpart I, 2 CFR §200.430, the District is required to document and maintain the support for salaries, wages and other forms of compensation to ensure they are properly charged to Federal awards. Effect: Noncompliance can result in the incorrect amount for services rendered being charged to the Federal award. Questioned Costs: None Recommendation: The District should ensure that they review, monitor, and update the appropriate documentation to support the salaries, wages and other forms of compensation charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. In the event that modifications for costs charged to grants are necessary, the district should make the appropriate amendments. Since this particular grant will not be closed out until September 30, 2024, the District should contact the New York State Department of Education (NYSED) and file the appropriate amendment, or work with NYSED to adjust future reimbursements to adjust for the amounts overcharged to the federal grant. In addition, the District should review its procedures for reviewing reimbursement for federal grants to ensure that any payroll costs charged to federal grants are supported by the proper documentation and are properly budgeted for that grant. Views of Responsible Officials of Auditee: The District implemented a new summer program utilizing federal grant funds approved by the NYSED. The District charged resource officers payroll costs that occurred during the scheduled approved summer program, however it was determined that these payroll costs were not budgeted in the federal grant, per the FS-10. Since the grant funding period of this grant is still open, the District contacted NYSED to determine the necessary course of action to rectify this matter. It was determined that the District will prepare and submit an FS-10A amending the original FS-10, to include the resource officer’s payroll costs in the grant as it relates to the approved summer program. In addition, the District will review its internal review procedures to ensure that payroll costs charged to federal grants are supported by the proper documentation for each employee and are allowable per the approved budget of the federal grant. The FS-10A will be prepared and filed prior to the June 30, 2024 by the Assistant Superintendent for Curriculum.
Significant Deficiency 2023-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Education Stabilization Funds (ESF) COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing No. 84.425U Criteria: Salaries, wages and any other forms of compensation charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries, wages and other forms of compensation must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs), timesheets, or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District inadvertently charged resource officers payroll costs to a federal grant, however, it was determined that these payroll costs were not budgeted in the federal grant and should not have been charged to the federal grant. Cause: This was an oversight by the District as these costs were not budgeted in the federal grant form FS-10, and should not have been charged to the federal grant. These payroll costs should have been charged to the general fund, however, this was not captured as part of the review for the reimbursement of expenditures for the federal grant. As described in Subpart I, 2 CFR §200.430, the District is required to document and maintain the support for salaries, wages and other forms of compensation to ensure they are properly charged to Federal awards. Effect: Noncompliance can result in the incorrect amount for services rendered being charged to the Federal award. Questioned Costs: None Recommendation: The District should ensure that they review, monitor, and update the appropriate documentation to support the salaries, wages and other forms of compensation charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. In the event that modifications for costs charged to grants are necessary, the district should make the appropriate amendments. Since this particular grant will not be closed out until September 30, 2024, the District should contact the New York State Department of Education (NYSED) and file the appropriate amendment, or work with NYSED to adjust future reimbursements to adjust for the amounts overcharged to the federal grant. In addition, the District should review its procedures for reviewing reimbursement for federal grants to ensure that any payroll costs charged to federal grants are supported by the proper documentation and are properly budgeted for that grant. Views of Responsible Officials of Auditee: The District implemented a new summer program utilizing federal grant funds approved by the NYSED. The District charged resource officers payroll costs that occurred during the scheduled approved summer program, however it was determined that these payroll costs were not budgeted in the federal grant, per the FS-10. Since the grant funding period of this grant is still open, the District contacted NYSED to determine the necessary course of action to rectify this matter. It was determined that the District will prepare and submit an FS-10A amending the original FS-10, to include the resource officer’s payroll costs in the grant as it relates to the approved summer program. In addition, the District will review its internal review procedures to ensure that payroll costs charged to federal grants are supported by the proper documentation for each employee and are allowable per the approved budget of the federal grant. The FS-10A will be prepared and filed prior to the June 30, 2024 by the Assistant Superintendent for Curriculum.
Significant Deficiency 2023-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Education Stabilization Funds (ESF) COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing No. 84.425U Criteria: Salaries, wages and any other forms of compensation charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries, wages and other forms of compensation must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs), timesheets, or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District inadvertently charged resource officers payroll costs to a federal grant, however, it was determined that these payroll costs were not budgeted in the federal grant and should not have been charged to the federal grant. Cause: This was an oversight by the District as these costs were not budgeted in the federal grant form FS-10, and should not have been charged to the federal grant. These payroll costs should have been charged to the general fund, however, this was not captured as part of the review for the reimbursement of expenditures for the federal grant. As described in Subpart I, 2 CFR §200.430, the District is required to document and maintain the support for salaries, wages and other forms of compensation to ensure they are properly charged to Federal awards. Effect: Noncompliance can result in the incorrect amount for services rendered being charged to the Federal award. Questioned Costs: None Recommendation: The District should ensure that they review, monitor, and update the appropriate documentation to support the salaries, wages and other forms of compensation charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. In the event that modifications for costs charged to grants are necessary, the district should make the appropriate amendments. Since this particular grant will not be closed out until September 30, 2024, the District should contact the New York State Department of Education (NYSED) and file the appropriate amendment, or work with NYSED to adjust future reimbursements to adjust for the amounts overcharged to the federal grant. In addition, the District should review its procedures for reviewing reimbursement for federal grants to ensure that any payroll costs charged to federal grants are supported by the proper documentation and are properly budgeted for that grant. Views of Responsible Officials of Auditee: The District implemented a new summer program utilizing federal grant funds approved by the NYSED. The District charged resource officers payroll costs that occurred during the scheduled approved summer program, however it was determined that these payroll costs were not budgeted in the federal grant, per the FS-10. Since the grant funding period of this grant is still open, the District contacted NYSED to determine the necessary course of action to rectify this matter. It was determined that the District will prepare and submit an FS-10A amending the original FS-10, to include the resource officer’s payroll costs in the grant as it relates to the approved summer program. In addition, the District will review its internal review procedures to ensure that payroll costs charged to federal grants are supported by the proper documentation for each employee and are allowable per the approved budget of the federal grant. The FS-10A will be prepared and filed prior to the June 30, 2024 by the Assistant Superintendent for Curriculum.
Significant Deficiency 2023-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Education Stabilization Funds (ESF) COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing No. 84.425U Criteria: Salaries, wages and any other forms of compensation charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries, wages and other forms of compensation must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs), timesheets, or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District inadvertently charged resource officers payroll costs to a federal grant, however, it was determined that these payroll costs were not budgeted in the federal grant and should not have been charged to the federal grant. Cause: This was an oversight by the District as these costs were not budgeted in the federal grant form FS-10, and should not have been charged to the federal grant. These payroll costs should have been charged to the general fund, however, this was not captured as part of the review for the reimbursement of expenditures for the federal grant. As described in Subpart I, 2 CFR §200.430, the District is required to document and maintain the support for salaries, wages and other forms of compensation to ensure they are properly charged to Federal awards. Effect: Noncompliance can result in the incorrect amount for services rendered being charged to the Federal award. Questioned Costs: None Recommendation: The District should ensure that they review, monitor, and update the appropriate documentation to support the salaries, wages and other forms of compensation charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. In the event that modifications for costs charged to grants are necessary, the district should make the appropriate amendments. Since this particular grant will not be closed out until September 30, 2024, the District should contact the New York State Department of Education (NYSED) and file the appropriate amendment, or work with NYSED to adjust future reimbursements to adjust for the amounts overcharged to the federal grant. In addition, the District should review its procedures for reviewing reimbursement for federal grants to ensure that any payroll costs charged to federal grants are supported by the proper documentation and are properly budgeted for that grant. Views of Responsible Officials of Auditee: The District implemented a new summer program utilizing federal grant funds approved by the NYSED. The District charged resource officers payroll costs that occurred during the scheduled approved summer program, however it was determined that these payroll costs were not budgeted in the federal grant, per the FS-10. Since the grant funding period of this grant is still open, the District contacted NYSED to determine the necessary course of action to rectify this matter. It was determined that the District will prepare and submit an FS-10A amending the original FS-10, to include the resource officer’s payroll costs in the grant as it relates to the approved summer program. In addition, the District will review its internal review procedures to ensure that payroll costs charged to federal grants are supported by the proper documentation for each employee and are allowable per the approved budget of the federal grant. The FS-10A will be prepared and filed prior to the June 30, 2024 by the Assistant Superintendent for Curriculum.
2023-001 Activities Allowed or Unallowed and Allowable Costs/Costs Principles Program: COVID-19 Emergency Rental Assistance Program Federal Assistance Listing No: 21.023 County Recipient: Community Action Partnership of Natrona County (CAP) Federal Agency: U.S. Department of the Treasury Grant year: 2023 Federal Award Identification: Unknown Applicable Pass-through Entity: Wyoming Department of Family Services Criteria Accounting practices of the non-Federal entity must provide for adequate documentation to support costs charged to the Federal award. Additionally, standards for documentation of personnel expenses in Uniform Guidance 2 CFR part 200.430 Compensation – personal services state that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among various other requirements, these records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. • Support the distribution of the employee’s salary or wages among specific activities or costs 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. • In accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR part 516), charges for the salaries and wages of nonexempt employees, in addition to the supporting documentation described in this section, must also be supported by records indicating the total number of hours worked each day. Condition CAP was missing a consistent system of internal control for tracking and approving the salaries and wages and other costs charged to the federal program. There were several timecards and transactions that were not approved by the supervisor or another individual knowledgeable of the grant. Additionally, journal entries were posted to classify salaries and wages to the grant without a supporting allocation and approval. For the transactions that were lacking support it was not possible to verify the costs were allowable. Therefore the amounts associated with these transactions are reported as questioned costs. Cause Due to turnover in grant management, processes that had previously existed were overlooked, which resulted in a lack of consistent approval of costs and an inconsistent system for the allocation of salaries and wages charged to the grant. Additionally, records that reflect the work performed were unavailable. Effect or potential effect CAP was unable to provide supporting documentation that the costs allocated to the grant were allowable. Questioned Cost $17,393 Context The internal control and compliance testing performed included testing 60 transactions out of 270 total grant transactions. Of the items tested, 32% of the transactions were missing approvals or adequate supporting documentation of the time and expense allocated to the grant. Identification as a repeat finding This is not a repeat finding. Recommendation We recommend CAP review its policies and procedures related to the internal controls over payroll and other transactions related to grants. Views of Responsible Officials CAPNC moved from an archaic, unsupported software system to Sage Intaact. This software provides the ability to modernize and deploy the levels of internal controls missing from previous fiscal personnel oversight and technical capability. Current staff have trained under Sage Intaact and Wipfli consultants to properly track A/P, A/R, payroll and grant management to ensure the integrity of data entry and compliance is observed. Board membership have access to accounting software through Board portal for further oversight. Payroll services were outsourced to ADP payroll services in order to provide real time features and accountability for time. This allows recording of time more accurate, reliable and allocable. Payroll records are reviewed and time studies are being performed for all staff to ensure allocation methodology, once selected is appropriate, consistent and in alignment with staff performance. Wipfli Consulting is providing technical assistance over a 10 month period to develop/deploy updated policies and procedures for fiscal area, in accordance with Uniform Guidance. Curriculum includes: All administrative leadership staff received, and will continue to receive annually, fiscal oversight training including but not limited to, Uniform Guidance training, grants management and compliance training. Allocations are reviewed regularly by leadership team to ensure that we have appropriate methodology and that we are consistent with grant expectations and regulations. See Corrective Action Plan
2023-002 Activities Allowed or Unallowed and Allowable Costs/Costs Principles Program: COVID-19 Community Services Block Grant Federal Assistance Listing No: 93.569 County Recipient: Community Action Partnership of Natrona County Federal Agency: Department of Health and Human Services Grant year: 2022 and 2023 Federal Award Identification: Unknown Applicable Pass-through Entity: Wyoming Department of Health Criteria Accounting practices of the non-Federal entity must provide for adequate documentation to support costs charged to the Federal award. Standards for documentation of personnel expenses in Uniform Guidance 2 CFR part 200.430 Compensation – personal services state that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among various other requirements, these records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. • Support the distribution of the employee’s salary or wages among specific activities or costs 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. • In accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR part 516), charges for the salaries and wages of nonexempt employees, in addition to the supporting documentation described in this section, must also be supported by records indicating the total number of hours worked each day. Grant agreements with Wyoming Department of Health include a Statement of Work. The Statement of Work includes a requirement that that the grantee conducts a time allocation analysis for any position dually-funded from other sources of funds to account for apportioned time charged against the contract. Condition CAP was missing a consistent system of internal control for tracking and approving the salaries and wages and other costs charged to the federal program. There were several timecards and transactions that were not approved by the supervisor or another individual knowledgeable of the grant. Additionally, journal entries were posted to classify salaries and wages to the grant without a supporting allocation and approval. For the transactions that were lacking support it was not possible to verify the costs were allowable. Therefore the amounts associated with these transactions are reported as questioned costs. Cause Due to turnover in grant management, processes that had previously existed were overlooked, which resulted in a lack of consistent approval of costs and an inconsistent system for the allocation of salaries and wages charged to the grant. Additionally, records that reflect the work performed were unavailable Effect or potential effect CAP was unable to provide supporting documentation that the costs allocated to the grant were allowable. Questioned Cost $32,364 Context The internal control and compliance testing performed included testing 50 transactions out of 981 total grant transactions. Of the items tested, 18% of the transactions were missing approvals or adequate supporting documentation of the time and expense allocated to the grant. Identification as a repeat finding This is not a repeat finding Recommendation We recommend CAP review its policies and procedures related to the internal controls over payroll, expenditures related to grants. Views of Responsible Officials CAPNC moved from an archaic, unsupported software system to Sage Intaact. This software provides the ability to modernize and deploy the levels of internal controls missing from previous fiscal personnel oversight and technical capability. Current staff have trained under Sage Intaact and Wipfli consultants to properly track A/P, A/R, payroll and grant management to ensure the integrity of data entry and compliance is observed. Board membership have access to accounting software through Board portal for further oversight. Payroll services were outsourced to ADP payroll services in order to provide real time features and accountability for time. This allows recording of time more accurate, reliable and allocable. Payroll records are reviewed and time studies are being performed for all staff to ensure allocation methodology, once selected is appropriate, consistent and in alignment with staff performance. Wipfli Consulting is providing technical assistance over a 10 month period to develop/deploy updated policies and procedures for fiscal area, in accordance with Uniform Guidance. Curriculum includes: All administrative leadership staff received, and will continue to receive annually, fiscal oversight training including but not limited to, Uniform Guidance training, grants management and compliance training. Allocations are reviewed regularly by leadership team to ensure that we have appropriate methodology and that we are consistent with grant expectations and regulations. See Corrective Action Plan
2023-002 Activities Allowed or Unallowed and Allowable Costs/Costs Principles Program: COVID-19 Community Services Block Grant Federal Assistance Listing No: 93.569 County Recipient: Community Action Partnership of Natrona County Federal Agency: Department of Health and Human Services Grant year: 2022 and 2023 Federal Award Identification: Unknown Applicable Pass-through Entity: Wyoming Department of Health Criteria Accounting practices of the non-Federal entity must provide for adequate documentation to support costs charged to the Federal award. Standards for documentation of personnel expenses in Uniform Guidance 2 CFR part 200.430 Compensation – personal services state that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among various other requirements, these records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. • Support the distribution of the employee’s salary or wages among specific activities or costs 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. • In accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR part 516), charges for the salaries and wages of nonexempt employees, in addition to the supporting documentation described in this section, must also be supported by records indicating the total number of hours worked each day. Grant agreements with Wyoming Department of Health include a Statement of Work. The Statement of Work includes a requirement that that the grantee conducts a time allocation analysis for any position dually-funded from other sources of funds to account for apportioned time charged against the contract. Condition CAP was missing a consistent system of internal control for tracking and approving the salaries and wages and other costs charged to the federal program. There were several timecards and transactions that were not approved by the supervisor or another individual knowledgeable of the grant. Additionally, journal entries were posted to classify salaries and wages to the grant without a supporting allocation and approval. For the transactions that were lacking support it was not possible to verify the costs were allowable. Therefore the amounts associated with these transactions are reported as questioned costs. Cause Due to turnover in grant management, processes that had previously existed were overlooked, which resulted in a lack of consistent approval of costs and an inconsistent system for the allocation of salaries and wages charged to the grant. Additionally, records that reflect the work performed were unavailable Effect or potential effect CAP was unable to provide supporting documentation that the costs allocated to the grant were allowable. Questioned Cost $32,364 Context The internal control and compliance testing performed included testing 50 transactions out of 981 total grant transactions. Of the items tested, 18% of the transactions were missing approvals or adequate supporting documentation of the time and expense allocated to the grant. Identification as a repeat finding This is not a repeat finding Recommendation We recommend CAP review its policies and procedures related to the internal controls over payroll, expenditures related to grants. Views of Responsible Officials CAPNC moved from an archaic, unsupported software system to Sage Intaact. This software provides the ability to modernize and deploy the levels of internal controls missing from previous fiscal personnel oversight and technical capability. Current staff have trained under Sage Intaact and Wipfli consultants to properly track A/P, A/R, payroll and grant management to ensure the integrity of data entry and compliance is observed. Board membership have access to accounting software through Board portal for further oversight. Payroll services were outsourced to ADP payroll services in order to provide real time features and accountability for time. This allows recording of time more accurate, reliable and allocable. Payroll records are reviewed and time studies are being performed for all staff to ensure allocation methodology, once selected is appropriate, consistent and in alignment with staff performance. Wipfli Consulting is providing technical assistance over a 10 month period to develop/deploy updated policies and procedures for fiscal area, in accordance with Uniform Guidance. Curriculum includes: All administrative leadership staff received, and will continue to receive annually, fiscal oversight training including but not limited to, Uniform Guidance training, grants management and compliance training. Allocations are reviewed regularly by leadership team to ensure that we have appropriate methodology and that we are consistent with grant expectations and regulations. See Corrective Action Plan
Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.300 of the Uniform Guidance, a non-federal entity must have the following policies over compliance: cash management (section 200.302(b)(6)), allowability of costs (section 200.302(b)(7)), procurement (section 200.318-.326, reporting (section 200.303), special tests (section 200.303), travel (section 200.475(b)), compensation (section 200.430(a)(1)), and fringe benefits (section 200.431). Condition: Written policies and procedures are not in accordance with the Uniform Guidance. Cause: Sufficient training has not been provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Effect or Potential Effect: Lack of policies and procedures in accordance with the Uniform Guidance could result in noncompliance, disallowed costs, or discontinuance of federal funding. Repeat Finding: No Recommendation: Additional training should be provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on creating written policies and procedures in accordance with the Uniform Guidance.