Finding 2024-001: Allowable Cost/Cost Principles – Enhanced Documentation of Cost Allocation (Repeat Finding) Criteria or Specific Requirements Per 2 CFR Part 200.430 (g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition Description A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Of the 50 employee monthly reimbursements (10 for ALN 14.241; 40 for ALN 93.914) selected for allowable costs testwork, we noted 2 employee monthly reimbursements (1 for ALN 14.241; 1 for ALN 93.914) for where the hours reported per the timesheet did not agree with the hours reported in the related request for reimbursement invoices. The hours reported per the reimbursement invoices were greater than the hours reported per the timesheets. The Foundation subsequently provided documentation indicating that such differences had been properly corrected in the following month’s reimbursement invoice through an adjustment to the reported hours per the reimbursement invoice. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to the Grants We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-001. Per the CAP, the Foundation will perform regular reviews of tracked hours and reconciliations at least quarterly. Of the 18 payroll reimbursement months (for ALN 93.914), and 4 payroll reimbursement months (for ALN 93.940) selected for testwork, we noted a total of 2 months (1 for ALN 93.914; 1 for ALN 93.940) whereby the related reviews of tracked hours were performed more than 90 days after the respective reimbursement month. C. Timecard Lacking Employee and Manager Approvals In performing allowable costs testwork over payroll expenditures, we noted the following: Questioned Costs A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges None. The Foundation corrected the discrepancies in subsequent monthly reimbursements. This issue is considered an internal control finding. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to Grants None. This issue is considered an internal control finding. C. Timecards Lacking Employee and Manager Approvals None. This issue is considered an internal control finding. Cause and Effect A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Per the Associate Director of Contract Accounting, this was a one-time error in the month’s request for reimbursement invoice. This error was corrected within the grant period and did not result in overbilling the funder. However, since the correction occurred after the Foundation’s fiscal year-end, it resulted in an overstatement of expenditures reported on the SEFA for the year ended December 31, 2024. B. Improved Documentation of Routinary Reviews of Employees' Hours Charged to Grants. Per the Associate Director of Contract Accounting, the routinary review of employee hours occurred. However, there were still reclassifications that needed to be performed beyond the normal review process. The review process was not properly implemented. C. Timecards Lacking Employee and Manager Approvals The identified condition resulted from failure to follow formal procedures requiring both the employee and manager to sign off on the timesheets.
Finding 2024-001: Allowable Cost/Cost Principles – Enhanced Documentation of Cost Allocation (Repeat Finding) Criteria or Specific Requirements Per 2 CFR Part 200.430 (g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition Description A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Of the 50 employee monthly reimbursements (10 for ALN 14.241; 40 for ALN 93.914) selected for allowable costs testwork, we noted 2 employee monthly reimbursements (1 for ALN 14.241; 1 for ALN 93.914) for where the hours reported per the timesheet did not agree with the hours reported in the related request for reimbursement invoices. The hours reported per the reimbursement invoices were greater than the hours reported per the timesheets. The Foundation subsequently provided documentation indicating that such differences had been properly corrected in the following month’s reimbursement invoice through an adjustment to the reported hours per the reimbursement invoice. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to the Grants We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-001. Per the CAP, the Foundation will perform regular reviews of tracked hours and reconciliations at least quarterly. Of the 18 payroll reimbursement months (for ALN 93.914), and 4 payroll reimbursement months (for ALN 93.940) selected for testwork, we noted a total of 2 months (1 for ALN 93.914; 1 for ALN 93.940) whereby the related reviews of tracked hours were performed more than 90 days after the respective reimbursement month. C. Timecard Lacking Employee and Manager Approvals In performing allowable costs testwork over payroll expenditures, we noted the following: Questioned Costs A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges None. The Foundation corrected the discrepancies in subsequent monthly reimbursements. This issue is considered an internal control finding. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to Grants None. This issue is considered an internal control finding. C. Timecards Lacking Employee and Manager Approvals None. This issue is considered an internal control finding. Cause and Effect A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Per the Associate Director of Contract Accounting, this was a one-time error in the month’s request for reimbursement invoice. This error was corrected within the grant period and did not result in overbilling the funder. However, since the correction occurred after the Foundation’s fiscal year-end, it resulted in an overstatement of expenditures reported on the SEFA for the year ended December 31, 2024. B. Improved Documentation of Routinary Reviews of Employees' Hours Charged to Grants. Per the Associate Director of Contract Accounting, the routinary review of employee hours occurred. However, there were still reclassifications that needed to be performed beyond the normal review process. The review process was not properly implemented. C. Timecards Lacking Employee and Manager Approvals The identified condition resulted from failure to follow formal procedures requiring both the employee and manager to sign off on the timesheets.
Finding 2024-001: Allowable Cost/Cost Principles – Enhanced Documentation of Cost Allocation (Repeat Finding) Criteria or Specific Requirements Per 2 CFR Part 200.430 (g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition Description A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Of the 50 employee monthly reimbursements (10 for ALN 14.241; 40 for ALN 93.914) selected for allowable costs testwork, we noted 2 employee monthly reimbursements (1 for ALN 14.241; 1 for ALN 93.914) for where the hours reported per the timesheet did not agree with the hours reported in the related request for reimbursement invoices. The hours reported per the reimbursement invoices were greater than the hours reported per the timesheets. The Foundation subsequently provided documentation indicating that such differences had been properly corrected in the following month’s reimbursement invoice through an adjustment to the reported hours per the reimbursement invoice. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to the Grants We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-001. Per the CAP, the Foundation will perform regular reviews of tracked hours and reconciliations at least quarterly. Of the 18 payroll reimbursement months (for ALN 93.914), and 4 payroll reimbursement months (for ALN 93.940) selected for testwork, we noted a total of 2 months (1 for ALN 93.914; 1 for ALN 93.940) whereby the related reviews of tracked hours were performed more than 90 days after the respective reimbursement month. C. Timecard Lacking Employee and Manager Approvals In performing allowable costs testwork over payroll expenditures, we noted the following: Questioned Costs A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges None. The Foundation corrected the discrepancies in subsequent monthly reimbursements. This issue is considered an internal control finding. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to Grants None. This issue is considered an internal control finding. C. Timecards Lacking Employee and Manager Approvals None. This issue is considered an internal control finding. Cause and Effect A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Per the Associate Director of Contract Accounting, this was a one-time error in the month’s request for reimbursement invoice. This error was corrected within the grant period and did not result in overbilling the funder. However, since the correction occurred after the Foundation’s fiscal year-end, it resulted in an overstatement of expenditures reported on the SEFA for the year ended December 31, 2024. B. Improved Documentation of Routinary Reviews of Employees' Hours Charged to Grants. Per the Associate Director of Contract Accounting, the routinary review of employee hours occurred. However, there were still reclassifications that needed to be performed beyond the normal review process. The review process was not properly implemented. C. Timecards Lacking Employee and Manager Approvals The identified condition resulted from failure to follow formal procedures requiring both the employee and manager to sign off on the timesheets.
Finding 2024-001: Allowable Cost/Cost Principles – Enhanced Documentation of Cost Allocation (Repeat Finding) Criteria or Specific Requirements Per 2 CFR Part 200.430 (g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition Description A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Of the 50 employee monthly reimbursements (10 for ALN 14.241; 40 for ALN 93.914) selected for allowable costs testwork, we noted 2 employee monthly reimbursements (1 for ALN 14.241; 1 for ALN 93.914) for where the hours reported per the timesheet did not agree with the hours reported in the related request for reimbursement invoices. The hours reported per the reimbursement invoices were greater than the hours reported per the timesheets. The Foundation subsequently provided documentation indicating that such differences had been properly corrected in the following month’s reimbursement invoice through an adjustment to the reported hours per the reimbursement invoice. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to the Grants We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-001. Per the CAP, the Foundation will perform regular reviews of tracked hours and reconciliations at least quarterly. Of the 18 payroll reimbursement months (for ALN 93.914), and 4 payroll reimbursement months (for ALN 93.940) selected for testwork, we noted a total of 2 months (1 for ALN 93.914; 1 for ALN 93.940) whereby the related reviews of tracked hours were performed more than 90 days after the respective reimbursement month. C. Timecard Lacking Employee and Manager Approvals In performing allowable costs testwork over payroll expenditures, we noted the following: Questioned Costs A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges None. The Foundation corrected the discrepancies in subsequent monthly reimbursements. This issue is considered an internal control finding. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to Grants None. This issue is considered an internal control finding. C. Timecards Lacking Employee and Manager Approvals None. This issue is considered an internal control finding. Cause and Effect A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Per the Associate Director of Contract Accounting, this was a one-time error in the month’s request for reimbursement invoice. This error was corrected within the grant period and did not result in overbilling the funder. However, since the correction occurred after the Foundation’s fiscal year-end, it resulted in an overstatement of expenditures reported on the SEFA for the year ended December 31, 2024. B. Improved Documentation of Routinary Reviews of Employees' Hours Charged to Grants. Per the Associate Director of Contract Accounting, the routinary review of employee hours occurred. However, there were still reclassifications that needed to be performed beyond the normal review process. The review process was not properly implemented. C. Timecards Lacking Employee and Manager Approvals The identified condition resulted from failure to follow formal procedures requiring both the employee and manager to sign off on the timesheets.
Finding 2024-001: Allowable Cost/Cost Principles – Enhanced Documentation of Cost Allocation (Repeat Finding) Criteria or Specific Requirements Per 2 CFR Part 200.430 (g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition Description A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Of the 50 employee monthly reimbursements (10 for ALN 14.241; 40 for ALN 93.914) selected for allowable costs testwork, we noted 2 employee monthly reimbursements (1 for ALN 14.241; 1 for ALN 93.914) for where the hours reported per the timesheet did not agree with the hours reported in the related request for reimbursement invoices. The hours reported per the reimbursement invoices were greater than the hours reported per the timesheets. The Foundation subsequently provided documentation indicating that such differences had been properly corrected in the following month’s reimbursement invoice through an adjustment to the reported hours per the reimbursement invoice. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to the Grants We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-001. Per the CAP, the Foundation will perform regular reviews of tracked hours and reconciliations at least quarterly. Of the 18 payroll reimbursement months (for ALN 93.914), and 4 payroll reimbursement months (for ALN 93.940) selected for testwork, we noted a total of 2 months (1 for ALN 93.914; 1 for ALN 93.940) whereby the related reviews of tracked hours were performed more than 90 days after the respective reimbursement month. C. Timecard Lacking Employee and Manager Approvals In performing allowable costs testwork over payroll expenditures, we noted the following: Questioned Costs A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges None. The Foundation corrected the discrepancies in subsequent monthly reimbursements. This issue is considered an internal control finding. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to Grants None. This issue is considered an internal control finding. C. Timecards Lacking Employee and Manager Approvals None. This issue is considered an internal control finding. Cause and Effect A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Per the Associate Director of Contract Accounting, this was a one-time error in the month’s request for reimbursement invoice. This error was corrected within the grant period and did not result in overbilling the funder. However, since the correction occurred after the Foundation’s fiscal year-end, it resulted in an overstatement of expenditures reported on the SEFA for the year ended December 31, 2024. B. Improved Documentation of Routinary Reviews of Employees' Hours Charged to Grants. Per the Associate Director of Contract Accounting, the routinary review of employee hours occurred. However, there were still reclassifications that needed to be performed beyond the normal review process. The review process was not properly implemented. C. Timecards Lacking Employee and Manager Approvals The identified condition resulted from failure to follow formal procedures requiring both the employee and manager to sign off on the timesheets.
Finding 2024‐002 Significant deficiency in internal controls over compliance related to allowable costs/cost principles compliance requirement. Federal Agency: Department of Treasury Program Title: Community Development Financial Institutions Fund Equitable Recovery Program (CDFI ERP) Federal Assistance Listing Number: 21.033 Award Number: 22ERP061530 Award Period: April 10, 2023 through December 31, 2028 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E require that personnel expenses allocated both directly and indirectly to federal awards be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, properly allocated and supported by adequate documentation based on an after the fact determination. Condition/Context for Evaluation During the year ended December 31, 2024, allocations of compensation expenditures were supported by a predetermined allocation created by a supervising manager responsible for overseeing all employees working on federally funded grants. The internal control system did not include a documented after the fact review of the actual activity conducted by the employee. Effect or Potential Effect HomeSight did not fully comply with the allowable cost principles as specified in 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E, Section 200.430. As a result, there may be charges to awards that do not have adequate allocation support. Questioned Costs Not determinable - HomeSight records lack established procedures of a documented after-the-fact level of activity. Accordingly, it is impossible to determine if there is a variance from pre-determined allocation levels. Cause HomeSight’s internal controls did not ensure that employees time allocated to federal awards was supported by adequate documentation. Repeat Finding Not a repeat finding. Recommendation We recommend that HomeSight implement the necessary internal control that includes processes to perform periodic after-the-fact reviews of charges made to a Federal award based on pre-determined allocation rates. View of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
2024-001: Allowable Costs Federal Agency: U.S. Department of Education Federal Program Name: Special Education – Special Olympics Education Programs Assistance Listing Number: 84.380W Pass-Through Agency: Special Olympics, Inc. Pass-Through Numbers: Y-16-24-800-12, Y-16-24-800-13 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that in one (1) of the eight (8) payroll expenses tested, wages charged to the grant did not match underlying payroll records. Questioned Costs: $101 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted an instance where payroll was not charged to the grants based upon approved actual time spent in the program. Cause: Clerical error in summarizing grant expenditures. Effect: The Organization has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to salary expenditures charged to a program. Personnel need to reinforce policies and control procedures to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat Finding: No Recommendation: We recommend that the Organization ensure policies and procedures for reviewing and approving payroll expenditures for grant programs be strengthened to ensure mathematically accuracy. Views of Responsible Officials: There is no disagreement with the audit finding.
2024-001: Allowable Costs Federal Agency: U.S. Department of Education Federal Program Name: Special Education – Special Olympics Education Programs Assistance Listing Number: 84.380W Pass-Through Agency: Special Olympics, Inc. Pass-Through Numbers: Y-16-24-800-12, Y-16-24-800-13 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that in one (1) of the eight (8) payroll expenses tested, wages charged to the grant did not match underlying payroll records. Questioned Costs: $101 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted an instance where payroll was not charged to the grants based upon approved actual time spent in the program. Cause: Clerical error in summarizing grant expenditures. Effect: The Organization has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to salary expenditures charged to a program. Personnel need to reinforce policies and control procedures to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat Finding: No Recommendation: We recommend that the Organization ensure policies and procedures for reviewing and approving payroll expenditures for grant programs be strengthened to ensure mathematically accuracy. Views of Responsible Officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024 001 Activities Allowed or Unallowed and Allowable Costs/Cost Principles U.S. Department of Homeland Security: Passed through the State of New Jersey, Department of Law and Public Safety: Disaster Grants – Public Assistance (Presidentially Declared Disasters) – ALN 97.036 Federal Grant Numbers and Years State of New Jersey pass through number: UH1WX Project #2365 – Award Year 2024 (Application 696220) Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Prior Year Findings: 2023-001 Criteria Compliance – Program Specific The Federal Emergency Management Agency (FEMA), as part of the U.S. Department of Homeland Security, evaluates the eligibility of all costs claimed by the applicant. Not all costs incurred as a result of the incident are eligible. (PAPPG v4) Chapter 4, page(s) 51 54; Chapter 6, page(s) 65 & 93 95. Cost must be: • Directly tied to the performance of eligible work; • Adequately documented (2 CFR section 200.403(g)); • Reduced by all applicable credits, such as insurance proceeds and salvage values (Stafford Act section 312, 42 USC section 5155, and 2 CFR section 200.406); • Authorized and not prohibited under federal, state, territorial, tribal, or local government laws or regulations; • Consistent with applicant’s internal policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the applicant; and • Necessary and reasonable to accomplish the work properly and efficiently (2 CFR section 200.403). 1. Applicant (Force Account) Labor FEMA refers to the applicant’s personnel as “force account.” FEMA reimburses force account labor based on actual hourly rates plus the cost of the employee’s actual fringe benefits. FEMA calculates the fringe benefit cost based on a percentage of the hourly pay rate. Because certain items in a benefit package are not dependent on hours worked (e.g., health insurance), the percentage for overtime is usually different than the percentage for straight time. Compliance – General Per 2 CFR Section 200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non federal entity. Internal Control Per 2 CFR section 200.303(a), a non federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition and Context The New Jersey Turnpike Authority (the “Authority”), through the State of New Jersey, Department of Homeland Security (the State), administers the federal Disaster Grants – Public Assistance (Presidentially Declared Disasters) program and is reimbursed for eligible expenditures when a presidentially declared disaster occurs. For the Authority’s force account labor costs, the Authority utilizes manual Daily Worksheets (timesheets) as the official records for time and effort worked during an event by the Authority’s personnel. These timesheets are then entered into the Authority’s information system (PeopleSoft) for review and approval, reconciling back to the information entered on the respective timesheet. For thirteen of sixty timesheets selected for testwork, the Authority was unable to provide the timesheets as the official record for the time and effort charged to the federal program. However, the Authority successfully demonstrated through PeopleSoft system that the time and effort charged to the federal program was properly reviewed and approved and reconciled to the amounts of reimbursement requested from the State. The finding is recurring from the prior year as the corrective action plan developed by the Authority from the prior year finding was not implemented until December 2024, which is subsequent to when these expenditures were incurred by the Authority between fiscal years 2020 and 2022. Cause The Authority did not maintain and make readily available certain timesheets used as the official record for the time and effort charged to the federal program in accordance with the Uniform Guidance. Effect The Authority did not comply with 2 CFR Section 200.430 related to incorporating the physical timesheets into the official records of the Authority. Questioned Costs None as the time and effort amounts charged were determined to be allowable. Recommendation We recommend that the Authority strengthen its processes to ensure that all timesheets for disaster related events that are federally funded are maintained and are made readily available if subject to audit or other inspection in accordance with the Uniform Guidance. Views of Responsible Officials Management agrees with the finding. Beginning in December 2024, as a commitment to strengthen our processes and ensure that all physical timesheets related to FEMA-declared disaster events are properly maintained and readily accessible, management put a process in place to enhance procedures and controls for timesheets going forward to ensure full compliance with the Uniform Guidance requirements. This process was successfully implemented as of this date and for prospective periods. However, this process does not remedy the issue noted in the finding which relates to time worked from 2020-2022, which is before the process was in place. Therefore, the finding is repeated from the prior year.
Finding Number 2024-001: Represents a significant deficiency in internal control over compliance. Repeat Finding: No Type of Finding: Significant Deficiency in Internal Control Over Compliance Description: Payroll Expenditures – Approval of Wage Confirmation Sheets Major Program: AL#93.569 - Community Service Block Grant – Award numbers CFS-24-7007 and CFS-25-7007 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of a sample of fourteen (14) payroll transactions (representing eight (8) individual employees), there were two (2) selections that did not have signed wage confirmation sheets. Criteria: 2 CFR 200.430(i) states that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. Wage confirmation sheets, which document the employees rate of pay, must be signed indicating approval. Cause: Due to inadequate staffing, the Organization does not have the proper review process in place to ensure that the wage confirmation sheets are reviewed and approved prior to payroll being processed. Effect: Without proper review and approval of the wage confirmation sheets, it is possible that grants could be charged incorrectly, resulting in misstated financial statements. Recommendation: We recommend the Organization implement systems and procedures to ensure all wage confirmation sheets have been reviewed and approved, to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
2024-001. Allowable Costs/Cost Principles United States Department of Health and Human Services, Substance Abuse and Mental Health Services Administration Passed Through Vibrant Emotional Health: Substance Abuse and Mental Health Services Administration - 988 National Suicide Prevention Lifeline ALN: 93.243 Substance Abuse and Mental Health Services Administration - Disaster Distress Helpline ALN: 93.243 Passed Through New York State Office of Mental Health: Substance Abuse and Mental Health Services Administration - 988 S11MY1 ALN: 93.243 Criteria: Uniform Guidance 2 CFR 200.430, covers standards for documentation of compensation-personal services. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and time spent. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, these records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Time records prepared by employees reflect the total hours worked for the day, but do not reflect the actual time spent on programs funded by a federal award, rather they are based on budgeted hours. Cause: The Organization allocates payroll to programs funded by awards based on the contract supported budget, which is based on an estimate of the time that work will be performed by individuals. At the time of the audit, the true-up of budgeted hours to actual hours worked had not been completed. Effect: Without time records, which are based on time worked to support the proper allocation of payroll, errors could occur and result in the Organization reporting and receiving reimbursement for the incorrect amount of payroll expenses chargeable to an award. Identification of a Repeat Finding: This is a repeat finding from the prior year, 2023-001. Questioned Costs: Dollar amount undetermined, Personnel Activity Report details not available. Recommendation: The Organization’s use of Personnel Activity Report equivalent documentation, should allow each employee to accurately reflect the time work is performed for each federal award. Views of Responsible Officials and Planned Corrective Action Plan: The Organization agrees with the finding as indicated in the Organization’s corrective action plan, and has modified procedures to reflect actual time worked by employees on PAR equivalent documentation. The Organization’s new payroll and time keeping system should capture information, which will support personnel expenses funded by each federal award.
2024-001. Allowable Costs/Cost Principles United States Department of Health and Human Services, Substance Abuse and Mental Health Services Administration Passed Through Vibrant Emotional Health: Substance Abuse and Mental Health Services Administration - 988 National Suicide Prevention Lifeline ALN: 93.243 Substance Abuse and Mental Health Services Administration - Disaster Distress Helpline ALN: 93.243 Passed Through New York State Office of Mental Health: Substance Abuse and Mental Health Services Administration - 988 S11MY1 ALN: 93.243 Criteria: Uniform Guidance 2 CFR 200.430, covers standards for documentation of compensation-personal services. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and time spent. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, these records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Time records prepared by employees reflect the total hours worked for the day, but do not reflect the actual time spent on programs funded by a federal award, rather they are based on budgeted hours. Cause: The Organization allocates payroll to programs funded by awards based on the contract supported budget, which is based on an estimate of the time that work will be performed by individuals. At the time of the audit, the true-up of budgeted hours to actual hours worked had not been completed. Effect: Without time records, which are based on time worked to support the proper allocation of payroll, errors could occur and result in the Organization reporting and receiving reimbursement for the incorrect amount of payroll expenses chargeable to an award. Identification of a Repeat Finding: This is a repeat finding from the prior year, 2023-001. Questioned Costs: Dollar amount undetermined, Personnel Activity Report details not available. Recommendation: The Organization’s use of Personnel Activity Report equivalent documentation, should allow each employee to accurately reflect the time work is performed for each federal award. Views of Responsible Officials and Planned Corrective Action Plan: The Organization agrees with the finding as indicated in the Organization’s corrective action plan, and has modified procedures to reflect actual time worked by employees on PAR equivalent documentation. The Organization’s new payroll and time keeping system should capture information, which will support personnel expenses funded by each federal award.
2024-001. Allowable Costs/Cost Principles United States Department of Health and Human Services, Substance Abuse and Mental Health Services Administration Passed Through Vibrant Emotional Health: Substance Abuse and Mental Health Services Administration - 988 National Suicide Prevention Lifeline ALN: 93.243 Substance Abuse and Mental Health Services Administration - Disaster Distress Helpline ALN: 93.243 Passed Through New York State Office of Mental Health: Substance Abuse and Mental Health Services Administration - 988 S11MY1 ALN: 93.243 Criteria: Uniform Guidance 2 CFR 200.430, covers standards for documentation of compensation-personal services. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and time spent. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, these records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Time records prepared by employees reflect the total hours worked for the day, but do not reflect the actual time spent on programs funded by a federal award, rather they are based on budgeted hours. Cause: The Organization allocates payroll to programs funded by awards based on the contract supported budget, which is based on an estimate of the time that work will be performed by individuals. At the time of the audit, the true-up of budgeted hours to actual hours worked had not been completed. Effect: Without time records, which are based on time worked to support the proper allocation of payroll, errors could occur and result in the Organization reporting and receiving reimbursement for the incorrect amount of payroll expenses chargeable to an award. Identification of a Repeat Finding: This is a repeat finding from the prior year, 2023-001. Questioned Costs: Dollar amount undetermined, Personnel Activity Report details not available. Recommendation: The Organization’s use of Personnel Activity Report equivalent documentation, should allow each employee to accurately reflect the time work is performed for each federal award. Views of Responsible Officials and Planned Corrective Action Plan: The Organization agrees with the finding as indicated in the Organization’s corrective action plan, and has modified procedures to reflect actual time worked by employees on PAR equivalent documentation. The Organization’s new payroll and time keeping system should capture information, which will support personnel expenses funded by each federal award.
2024-001. Allowable Costs/Cost Principles United States Department of Health and Human Services, Substance Abuse and Mental Health Services Administration Passed Through Vibrant Emotional Health: Substance Abuse and Mental Health Services Administration - 988 National Suicide Prevention Lifeline ALN: 93.243 Substance Abuse and Mental Health Services Administration - Disaster Distress Helpline ALN: 93.243 Passed Through New York State Office of Mental Health: Substance Abuse and Mental Health Services Administration - 988 S11MY1 ALN: 93.243 Criteria: Uniform Guidance 2 CFR 200.430, covers standards for documentation of compensation-personal services. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and time spent. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, these records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Time records prepared by employees reflect the total hours worked for the day, but do not reflect the actual time spent on programs funded by a federal award, rather they are based on budgeted hours. Cause: The Organization allocates payroll to programs funded by awards based on the contract supported budget, which is based on an estimate of the time that work will be performed by individuals. At the time of the audit, the true-up of budgeted hours to actual hours worked had not been completed. Effect: Without time records, which are based on time worked to support the proper allocation of payroll, errors could occur and result in the Organization reporting and receiving reimbursement for the incorrect amount of payroll expenses chargeable to an award. Identification of a Repeat Finding: This is a repeat finding from the prior year, 2023-001. Questioned Costs: Dollar amount undetermined, Personnel Activity Report details not available. Recommendation: The Organization’s use of Personnel Activity Report equivalent documentation, should allow each employee to accurately reflect the time work is performed for each federal award. Views of Responsible Officials and Planned Corrective Action Plan: The Organization agrees with the finding as indicated in the Organization’s corrective action plan, and has modified procedures to reflect actual time worked by employees on PAR equivalent documentation. The Organization’s new payroll and time keeping system should capture information, which will support personnel expenses funded by each federal award.
2024-001. Allowable Costs/Cost Principles United States Department of Health and Human Services, Substance Abuse and Mental Health Services Administration Passed Through Vibrant Emotional Health: Substance Abuse and Mental Health Services Administration - 988 National Suicide Prevention Lifeline ALN: 93.243 Substance Abuse and Mental Health Services Administration - Disaster Distress Helpline ALN: 93.243 Passed Through New York State Office of Mental Health: Substance Abuse and Mental Health Services Administration - 988 S11MY1 ALN: 93.243 Criteria: Uniform Guidance 2 CFR 200.430, covers standards for documentation of compensation-personal services. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and time spent. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, these records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Time records prepared by employees reflect the total hours worked for the day, but do not reflect the actual time spent on programs funded by a federal award, rather they are based on budgeted hours. Cause: The Organization allocates payroll to programs funded by awards based on the contract supported budget, which is based on an estimate of the time that work will be performed by individuals. At the time of the audit, the true-up of budgeted hours to actual hours worked had not been completed. Effect: Without time records, which are based on time worked to support the proper allocation of payroll, errors could occur and result in the Organization reporting and receiving reimbursement for the incorrect amount of payroll expenses chargeable to an award. Identification of a Repeat Finding: This is a repeat finding from the prior year, 2023-001. Questioned Costs: Dollar amount undetermined, Personnel Activity Report details not available. Recommendation: The Organization’s use of Personnel Activity Report equivalent documentation, should allow each employee to accurately reflect the time work is performed for each federal award. Views of Responsible Officials and Planned Corrective Action Plan: The Organization agrees with the finding as indicated in the Organization’s corrective action plan, and has modified procedures to reflect actual time worked by employees on PAR equivalent documentation. The Organization’s new payroll and time keeping system should capture information, which will support personnel expenses funded by each federal award.
2024-001. Allowable Costs/Cost Principles United States Department of Health and Human Services, Substance Abuse and Mental Health Services Administration Passed Through Vibrant Emotional Health: Substance Abuse and Mental Health Services Administration - 988 National Suicide Prevention Lifeline ALN: 93.243 Substance Abuse and Mental Health Services Administration - Disaster Distress Helpline ALN: 93.243 Passed Through New York State Office of Mental Health: Substance Abuse and Mental Health Services Administration - 988 S11MY1 ALN: 93.243 Criteria: Uniform Guidance 2 CFR 200.430, covers standards for documentation of compensation-personal services. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and time spent. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, these records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Time records prepared by employees reflect the total hours worked for the day, but do not reflect the actual time spent on programs funded by a federal award, rather they are based on budgeted hours. Cause: The Organization allocates payroll to programs funded by awards based on the contract supported budget, which is based on an estimate of the time that work will be performed by individuals. At the time of the audit, the true-up of budgeted hours to actual hours worked had not been completed. Effect: Without time records, which are based on time worked to support the proper allocation of payroll, errors could occur and result in the Organization reporting and receiving reimbursement for the incorrect amount of payroll expenses chargeable to an award. Identification of a Repeat Finding: This is a repeat finding from the prior year, 2023-001. Questioned Costs: Dollar amount undetermined, Personnel Activity Report details not available. Recommendation: The Organization’s use of Personnel Activity Report equivalent documentation, should allow each employee to accurately reflect the time work is performed for each federal award. Views of Responsible Officials and Planned Corrective Action Plan: The Organization agrees with the finding as indicated in the Organization’s corrective action plan, and has modified procedures to reflect actual time worked by employees on PAR equivalent documentation. The Organization’s new payroll and time keeping system should capture information, which will support personnel expenses funded by each federal award.
2024-002 Compensation for Personal Services Coronavirus State & Local Fiscal Recovery Funds – Assistance Listing No. 21.027 – COVID-19 Funding Award Number: 24-IHFA 186302 – Award Period: October 1, 2023 through September 30, 2024 Award Number: Aurora ARPA – Award Period: April 1, 2024 through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: Hours spent working on different funding sources/cost objectives from payroll timesheets did not agree to hours entered into the payroll allocation spreadsheets for five pay periods for sampled employees #1 and #2. Additionally, total hours worked and logged on timesheets did not agree to hours paid for two pay periods for sampled employees #1 and #3. These errors were not detected and corrected after-the-fact. Criteria: According to 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR 200.430(i)(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 Questioned Costs: Not determinable. Cause: The Organization’s established internal controls over salary and wage cost allocation did not operate as intended. Effect: Allowable costs could potentially be overpaid or underpaid or disallowed and required to be paid back to the Federal awarding agency (and/or pass-through entity). Recommendation: The Organization should strengthen their policies and procedures to support a system of internal control able to prevent and/or detect and correct errors timely ensuring costs are accurate, allowable, and properly allocated. Views of Responsible Officials and Planned Corrective Actions: Gateway Domestic Violence Services acknowledges there were errors made but can attest that the charges to funders were correct. See separately issued corrective action plan.
2024-002 Compensation for Personal Services Coronavirus State & Local Fiscal Recovery Funds – Assistance Listing No. 21.027 – COVID-19 Funding Award Number: 24-IHFA 186302 – Award Period: October 1, 2023 through September 30, 2024 Award Number: Aurora ARPA – Award Period: April 1, 2024 through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: Hours spent working on different funding sources/cost objectives from payroll timesheets did not agree to hours entered into the payroll allocation spreadsheets for five pay periods for sampled employees #1 and #2. Additionally, total hours worked and logged on timesheets did not agree to hours paid for two pay periods for sampled employees #1 and #3. These errors were not detected and corrected after-the-fact. Criteria: According to 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR 200.430(i)(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 Questioned Costs: Not determinable. Cause: The Organization’s established internal controls over salary and wage cost allocation did not operate as intended. Effect: Allowable costs could potentially be overpaid or underpaid or disallowed and required to be paid back to the Federal awarding agency (and/or pass-through entity). Recommendation: The Organization should strengthen their policies and procedures to support a system of internal control able to prevent and/or detect and correct errors timely ensuring costs are accurate, allowable, and properly allocated. Views of Responsible Officials and Planned Corrective Actions: Gateway Domestic Violence Services acknowledges there were errors made but can attest that the charges to funders were correct. See separately issued corrective action plan.
Finding # 2024-001 Type: Material weakness Type: Material noncompliance Assistance Listing Number: Department of Health and Human Services 93.658 Requirement: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Such records must meet the standards as specified in 2 CFR 200 Subpart E Cost Principles §200.430. Condition: Payroll allocations were done based on management’s estimate through departmental meetings and work assignments rather than actual time records maintained by staff. Context: Payroll allocation during the months of January through April 2024 were based on estimates. Total payroll charged during this time was approximately $218,000 of the $815,000 total federal expenditures for the year. Cause: Management became aware of the need for a time tracking system after the activities funded by the Federal awards began. Effect: Payroll costs charged to the grant may not be accurate. Questioned Costs: Approximately $218,000 Recommendation: We recommend that management continue to reinforce utilization of the time tracking system that was implemented in 2024. In addition, management should ensure that the timecards submitted by staff are reviewed and approved timely. Management’s Response: Management agrees and as noted, a new time tracking system was implemented in May 2024 and no exceptions were identified after implementation.
Significant Deficiency in Internal Control Over Compliance and Noncompliance – Inadequate Payroll Review and Documentation B. Allowable Costs/Cost Principles Criteria: Per 2 CFR § 200.430(g), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. As part of ELI’s internal controls, time and effort documentation, such as employee salary and wage allocations, should be reviewed and approved by ELI to confirm accuracy and consistency with policies or approvals. Condition and Context: We haphazardly selected three months of payroll allocations which included 23 individuals. Our sample was not statistically valid. During our testing of payroll expenses charged to the federal program, we noted controls in place were not sufficient to ensure the amounts charged to the award were properly reviewed and approved to ensure amounts charged agreed to those approved to be charged. This resulted in three errors identified in our testing: January payroll allocations were based on the approved budget, but the amounts charged differed from the budgeted amounts resulting in known questioned costs of $1,014. This impacted 18 of the 23 individuals selected for testing. Two individuals charged to the award had time which was not approved to be charged to the award resulting in known questioned costs of $8,395 and likely questioned costs of $31,717. Likely questioned costs were calculated by quantifying the total amount of payroll for these individuals which were charged to the federal award. Paid time off and holiday pay were not allocated to the awards at the approved allocation rate throughout 2024. This resulted in the cost being under-allocated by $1,924 which did not result in any known question costs. Cause and Effect: Management was working to establish improved controls for reviewing and approving payroll expenses charged to federal awards. This ultimately resulted in establishing a monthly review of all payroll charges to federal awards starting in July 2024. However, management did not include any detective controls to review that approved payroll allocations were being implemented as intended. This resulted in the errors noted above. Recommendation: We recommend that management establish detective controls to ensure payroll expenses are being charged consistently with established policies and approved allocations. Views of Responsible Officials and Planned Corrective Action: We agree with the recommendation and portions of the plan were implemented in February 2024, while the remainder was implemented in July 2025. In January 2024, the ELI team reviewed team members and their respective salary allocations, specifically for the Early Head Start program. Allocations were documented and updated in Axiom, ELI’s payroll system of record. Those allocations were then updated in early February 2024 and regular meetings to review, document and update allocations as needed, have since been held on a consistent basis. The secondary piece, corrected in July 2025, was a system correction for allocation of PTO and Holiday pay, those were not being allocated to EHS consistent with the agreed upon allocations and not going to EHS as they should have been. This has been corrected in Axiom and the ELI accounting team will now perform regular reviews to confirm allocation in agreement with the agreed upon amounts. In addition, correcting entries for 2024 and 2025 will be made by August 31, 2025.
Significant Deficiency in Internal Control Over Compliance and Noncompliance – Inadequate Payroll Review and Documentation B. Allowable Costs/Cost Principles Criteria: Per 2 CFR § 200.430(g), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. As part of ELI’s internal controls, time and effort documentation, such as employee salary and wage allocations, should be reviewed and approved by ELI to confirm accuracy and consistency with policies or approvals. Condition and Context: We haphazardly selected three months of payroll allocations which included 23 individuals. Our sample was not statistically valid. During our testing of payroll expenses charged to the federal program, we noted controls in place were not sufficient to ensure the amounts charged to the award were properly reviewed and approved to ensure amounts charged agreed to those approved to be charged. This resulted in three errors identified in our testing: January payroll allocations were based on the approved budget, but the amounts charged differed from the budgeted amounts resulting in known questioned costs of $1,014. This impacted 18 of the 23 individuals selected for testing. Two individuals charged to the award had time which was not approved to be charged to the award resulting in known questioned costs of $8,395 and likely questioned costs of $31,717. Likely questioned costs were calculated by quantifying the total amount of payroll for these individuals which were charged to the federal award. Paid time off and holiday pay were not allocated to the awards at the approved allocation rate throughout 2024. This resulted in the cost being under-allocated by $1,924 which did not result in any known question costs. Cause and Effect: Management was working to establish improved controls for reviewing and approving payroll expenses charged to federal awards. This ultimately resulted in establishing a monthly review of all payroll charges to federal awards starting in July 2024. However, management did not include any detective controls to review that approved payroll allocations were being implemented as intended. This resulted in the errors noted above. Recommendation: We recommend that management establish detective controls to ensure payroll expenses are being charged consistently with established policies and approved allocations. Views of Responsible Officials and Planned Corrective Action: We agree with the recommendation and portions of the plan were implemented in February 2024, while the remainder was implemented in July 2025. In January 2024, the ELI team reviewed team members and their respective salary allocations, specifically for the Early Head Start program. Allocations were documented and updated in Axiom, ELI’s payroll system of record. Those allocations were then updated in early February 2024 and regular meetings to review, document and update allocations as needed, have since been held on a consistent basis. The secondary piece, corrected in July 2025, was a system correction for allocation of PTO and Holiday pay, those were not being allocated to EHS consistent with the agreed upon allocations and not going to EHS as they should have been. This has been corrected in Axiom and the ELI accounting team will now perform regular reviews to confirm allocation in agreement with the agreed upon amounts. In addition, correcting entries for 2024 and 2025 will be made by August 31, 2025.
Significant Deficiency in Internal Control Over Compliance and Noncompliance – Inadequate Payroll Review and Documentation B. Allowable Costs/Cost Principles Criteria: Per 2 CFR § 200.430(g), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. As part of ELI’s internal controls, time and effort documentation, such as employee salary and wage allocations, should be reviewed and approved by ELI to confirm accuracy and consistency with policies or approvals. Condition and Context: We haphazardly selected three months of payroll allocations which included 23 individuals. Our sample was not statistically valid. During our testing of payroll expenses charged to the federal program, we noted controls in place were not sufficient to ensure the amounts charged to the award were properly reviewed and approved to ensure amounts charged agreed to those approved to be charged. This resulted in three errors identified in our testing: January payroll allocations were based on the approved budget, but the amounts charged differed from the budgeted amounts resulting in known questioned costs of $1,014. This impacted 18 of the 23 individuals selected for testing. Two individuals charged to the award had time which was not approved to be charged to the award resulting in known questioned costs of $8,395 and likely questioned costs of $31,717. Likely questioned costs were calculated by quantifying the total amount of payroll for these individuals which were charged to the federal award. Paid time off and holiday pay were not allocated to the awards at the approved allocation rate throughout 2024. This resulted in the cost being under-allocated by $1,924 which did not result in any known question costs. Cause and Effect: Management was working to establish improved controls for reviewing and approving payroll expenses charged to federal awards. This ultimately resulted in establishing a monthly review of all payroll charges to federal awards starting in July 2024. However, management did not include any detective controls to review that approved payroll allocations were being implemented as intended. This resulted in the errors noted above. Recommendation: We recommend that management establish detective controls to ensure payroll expenses are being charged consistently with established policies and approved allocations. Views of Responsible Officials and Planned Corrective Action: We agree with the recommendation and portions of the plan were implemented in February 2024, while the remainder was implemented in July 2025. In January 2024, the ELI team reviewed team members and their respective salary allocations, specifically for the Early Head Start program. Allocations were documented and updated in Axiom, ELI’s payroll system of record. Those allocations were then updated in early February 2024 and regular meetings to review, document and update allocations as needed, have since been held on a consistent basis. The secondary piece, corrected in July 2025, was a system correction for allocation of PTO and Holiday pay, those were not being allocated to EHS consistent with the agreed upon allocations and not going to EHS as they should have been. This has been corrected in Axiom and the ELI accounting team will now perform regular reviews to confirm allocation in agreement with the agreed upon amounts. In addition, correcting entries for 2024 and 2025 will be made by August 31, 2025.
Finding 2024-002 Insufficient Documentation of Personnel Expenses Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition: The Organization charges a material amount of payroll-related costs to its major federal program. However, it does not maintain sufficient documentation to support the level of effort charged to the award, as required by federal regulations. While staff members are required to complete timesheets, the current format does not capture the level of detail needed to substantiate payroll allocations to federal programs. Additionally, there is no formal process for supervisory review and approval of these timesheets. Although no overcharges or double-dipping were identified, the lack of adequate documentation results in known and likely questioned costs due to noncompliance with documentation requirements. Criteria: According to Uniform Guidance 2 CFR §200.430(g), the Organization's charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The records also must reasonably reflect the total activity for which the employee is compensated. The records also must support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Cause: This issue appears to stem from two primary causes: (1) the timesheet system in use was not designed to capture the information needed to support federal payroll charges, and (2) there is a lack of formal internal controls around timekeeping, including supervisory review and approval of reported time. Possible of Known Effect: As a result, a material amount of salary and payroll taxes charged to the federal program is not adequately supported in accordance with 2 CFR 200.430. This leads to both known and likely questioned costs. The absence of proper documentation increases the risk of misallocated expenses and undermines the Organization’s ability to demonstrate compliance with federal cost principles. Questioned Costs: Known questioned costs of $36,262 were identified. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization revise its timekeeping system to ensure that staff members record time in a manner that clearly supports the allocation of payroll costs to federal programs. Timesheets should include sufficient detail and be reviewed and approved by supervisors, with documentation of this review retained for audit purposes. For senior leadership, including the CEO, the Organization should implement appropriate methods such as time studies or activity logs to document effort charged to federal awards. Additionally, we recommend the development and documentation of internal controls to oversee the time reporting process and ensure compliance with federal requirements. Views of Responsible Officials: The Organization will develop and implement a standardized timesheet template (Gusto) that captures employee name, pay period, hours worked by funding source, and supervisory approval. Provide mandatory training for all staff whose salaries are charged in whole or in part to grants on documentation and time allocation requirements. Require monthly reconciliation of time sheets to payroll records before submission to grants. The Organization will conduct quarterly internal reviews to ensure compliance and adjust as needed.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
Criteria or Specific Requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed. Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities. Condition: During our testing we noted: Payroll transactions: Eleven instances of errors totaling a net amount of $2,009 (an absolute value amount of $2,009) where the incorrect percentages were utilized in the allocation of the employee's pay, the incorrect employee's time was used in the allocation of the employee's pay, or there were unsupported amounts added to the allocation of the employee’s pay, and Payroll transactions: Seven instances of errors totaling a net amount of $109 (an absolute value amount of $4,405) where an unsupported allocation percentage was used to allocate the employee's pay to the grant - typically, employee salaries are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund. Fringe-benefit transactions: Two instances of an error totaling $91 where an unsupported allocation percentage was used to allocate employer-paid employee insurance costs to the grant - typically, costs are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund. Fringe-benefit transactions: Two instances of errors totaling $275 where employer-paid employee insurance and HSA contribution deductions per the employee's pay stub were allocated to the grant at a rate of 100%. Non-payroll and fringe transactions: one instance of an error totaling $884 where an unsupported allocation percentage was used to allocate general costs to the grant - typically, costs are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund. Additionally, we noted inconsistency in the general fund (LSC and two other private grants) allocation basis used during the year - grant hours and projected revenue were both utilized at different times during the year. Additionally, we noted that allocations in the general fund are done using projected revenue. However as revenue was recognized as expenses were incurred for the general fund the allocation based on revenue approximated an allocation method based on costs. As such, the costs mentioned above were allocated in an inconsistent manner to other grant costs and were not fully representative of the employees’ time and effort. However, we noted a lower frequency of differences in sample selections that occurred during the last several months of the year after management implemented a change to its allocation processes in response to the prior year audit. 2024 – 002: Cost Allocation of Expenses to LSC Grants (Continued) Questioned Costs: A net amount of $3,150 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060. Context: These 23 instances were noting during testing of 55 disbursements. Cause: The Organization’s cost allocation methodology is primarily based on time and effort records, and periodic calculations of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund, but it often includes manual adjustments based on review of individual time records, expense and other data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations. Effect: The inclusion of frequent manual adjustments in the Organization’s cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities and in a manner where costs are not applied uniformly to both LSC (or, federally)-funded and non-LSC (of, federally) -funded activities. Repeat Finding: The finding is a repeat of findings in the immediately prior year. The prior year finding numbers were 2023-003 and 2023-004. Recommendation: We recommend that the Organization consider updating its cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities, and that are reflective on employees’ time and effort records Views of responsible officials: Management partially agrees with this finding. First, 45 CFR Part 1635 codifies the timekeeping requirement. CLS keeps track of every case and time dedicated by staff in strict compliance with this requirement. Additionally, the distribution of expenses in the general fund, which includes LSC and two other funding sources, represents a fair method and allocation. Regarding the questioned costs, CLS disagrees with the finding of material weakness given the extremely low total dollar value. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. Federal regulations state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Criteria or Specific Requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed. Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities. Condition: During our testing we noted: Payroll transactions: Eleven instances of errors totaling a net amount of $2,009 (an absolute value amount of $2,009) where the incorrect percentages were utilized in the allocation of the employee's pay, the incorrect employee's time was used in the allocation of the employee's pay, or there were unsupported amounts added to the allocation of the employee’s pay, and Payroll transactions: Seven instances of errors totaling a net amount of $109 (an absolute value amount of $4,405) where an unsupported allocation percentage was used to allocate the employee's pay to the grant - typically, employee salaries are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund. Fringe-benefit transactions: Two instances of an error totaling $91 where an unsupported allocation percentage was used to allocate employer-paid employee insurance costs to the grant - typically, costs are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund. Fringe-benefit transactions: Two instances of errors totaling $275 where employer-paid employee insurance and HSA contribution deductions per the employee's pay stub were allocated to the grant at a rate of 100%. Non-payroll and fringe transactions: one instance of an error totaling $884 where an unsupported allocation percentage was used to allocate general costs to the grant - typically, costs are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund. Additionally, we noted inconsistency in the general fund (LSC and two other private grants) allocation basis used during the year - grant hours and projected revenue were both utilized at different times during the year. Additionally, we noted that allocations in the general fund are done using projected revenue. However as revenue was recognized as expenses were incurred for the general fund the allocation based on revenue approximated an allocation method based on costs. As such, the costs mentioned above were allocated in an inconsistent manner to other grant costs and were not fully representative of the employees’ time and effort. However, we noted a lower frequency of differences in sample selections that occurred during the last several months of the year after management implemented a change to its allocation processes in response to the prior year audit. 2024 – 002: Cost Allocation of Expenses to LSC Grants (Continued) Questioned Costs: A net amount of $3,150 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060. Context: These 23 instances were noting during testing of 55 disbursements. Cause: The Organization’s cost allocation methodology is primarily based on time and effort records, and periodic calculations of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund, but it often includes manual adjustments based on review of individual time records, expense and other data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations. Effect: The inclusion of frequent manual adjustments in the Organization’s cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities and in a manner where costs are not applied uniformly to both LSC (or, federally)-funded and non-LSC (of, federally) -funded activities. Repeat Finding: The finding is a repeat of findings in the immediately prior year. The prior year finding numbers were 2023-003 and 2023-004. Recommendation: We recommend that the Organization consider updating its cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities, and that are reflective on employees’ time and effort records Views of responsible officials: Management partially agrees with this finding. First, 45 CFR Part 1635 codifies the timekeeping requirement. CLS keeps track of every case and time dedicated by staff in strict compliance with this requirement. Additionally, the distribution of expenses in the general fund, which includes LSC and two other funding sources, represents a fair method and allocation. Regarding the questioned costs, CLS disagrees with the finding of material weakness given the extremely low total dollar value. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. Federal regulations state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Criteria or Specific Requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed. Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities. Condition: During our testing we noted: Payroll transactions: Eleven instances of errors totaling a net amount of $2,009 (an absolute value amount of $2,009) where the incorrect percentages were utilized in the allocation of the employee's pay, the incorrect employee's time was used in the allocation of the employee's pay, or there were unsupported amounts added to the allocation of the employee’s pay, and Payroll transactions: Seven instances of errors totaling a net amount of $109 (an absolute value amount of $4,405) where an unsupported allocation percentage was used to allocate the employee's pay to the grant - typically, employee salaries are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund. Fringe-benefit transactions: Two instances of an error totaling $91 where an unsupported allocation percentage was used to allocate employer-paid employee insurance costs to the grant - typically, costs are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund. Fringe-benefit transactions: Two instances of errors totaling $275 where employer-paid employee insurance and HSA contribution deductions per the employee's pay stub were allocated to the grant at a rate of 100%. Non-payroll and fringe transactions: one instance of an error totaling $884 where an unsupported allocation percentage was used to allocate general costs to the grant - typically, costs are allocated to LSC and two other private grants using an allocation base of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund. Additionally, we noted inconsistency in the general fund (LSC and two other private grants) allocation basis used during the year - grant hours and projected revenue were both utilized at different times during the year. Additionally, we noted that allocations in the general fund are done using projected revenue. However as revenue was recognized as expenses were incurred for the general fund the allocation based on revenue approximated an allocation method based on costs. As such, the costs mentioned above were allocated in an inconsistent manner to other grant costs and were not fully representative of the employees’ time and effort. However, we noted a lower frequency of differences in sample selections that occurred during the last several months of the year after management implemented a change to its allocation processes in response to the prior year audit. 2024 – 002: Cost Allocation of Expenses to LSC Grants (Continued) Questioned Costs: A net amount of $3,150 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060. Context: These 23 instances were noting during testing of 55 disbursements. Cause: The Organization’s cost allocation methodology is primarily based on time and effort records, and periodic calculations of a LSC cost driver for the period divided by the total cost driver coded to the Organization’s general fund, but it often includes manual adjustments based on review of individual time records, expense and other data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations. Effect: The inclusion of frequent manual adjustments in the Organization’s cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities and in a manner where costs are not applied uniformly to both LSC (or, federally)-funded and non-LSC (of, federally) -funded activities. Repeat Finding: The finding is a repeat of findings in the immediately prior year. The prior year finding numbers were 2023-003 and 2023-004. Recommendation: We recommend that the Organization consider updating its cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities, and that are reflective on employees’ time and effort records Views of responsible officials: Management partially agrees with this finding. First, 45 CFR Part 1635 codifies the timekeeping requirement. CLS keeps track of every case and time dedicated by staff in strict compliance with this requirement. Additionally, the distribution of expenses in the general fund, which includes LSC and two other funding sources, represents a fair method and allocation. Regarding the questioned costs, CLS disagrees with the finding of material weakness given the extremely low total dollar value. Auditor’s Concluding Remarks: Management’s response did not persuade the auditor to revise the finding. Federal regulations state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Significant deficiency in internal control over compliance and noncompliance related to allowable costs/cost principles compliance requirements. Federal Agency: U.S. Department of Treasury Pass-Through Entity: City and County of Denver Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number: 202474319 Criteria Nonfederal entities must follow the standards for documentation of personnel expenses set out at 2 CFR section 200.430(i). Under those standards, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Additionally, those standards require that the records a) reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, not exceeding 100% of compensated activities; b) 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 nonfederal 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; and c) budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards. Budget estimates may be used for interim account purposes, provided that a) The system for establishing the estimates produces reasonable approximations of the activity performed; b) significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and c) the recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated Condition and Context The Organization maintains a timekeeping and payroll system for charges to federal awards that documents approved wage and salary rates, time and effort certification, hours, and actual amounts paid to employees. The Organization is allocating payroll costs to federal programs for individual employees using budget estimates of time and effort on different activities. The Organization maintains after-the-fact review documentation of time spent for each employee to support the allocation in the form of “Time and Effort” certifications that are signed by all employees and supervisors to verify actual time spent on major program. During our testing we noted two pay-periods for one employee where the Organization did not maintain the “Time and Effort” certification. Section III - Reportable Findings and Questioned Costs for Federal Awards Cause The Organization’s management noted that the missing certifications were due to the employee leaving employment before the certifications were completed for the two pay periods. The Organization did not have a process in place to ensure alternate certification documentation was created and retained in the situation of terminated employees. Effect The effect is that the Organization is not in compliance with the requirements of 2 CFR section 200.430(i) for the two pay periods for this employee. For two pay-periods for one employee the payroll costs charged to the major program were not supported by documentation of after-the-fact review evidencing that those costs reasonably reflect the work actually performed on the activity. Questioned Costs The expenditures for the two pay periods for the one employee totaled of $8,846. Repeat Finding This is not a repeat finding. Recommendation We recommend management update its internal control process for employees who depart or are unable to certify their timesheets to ensure all time spent on federal programs is certified by employees and their supervisors. Views of Responsible Official and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Finding 2024-002 Payroll Information on the Federal Programs: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): 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. These records must support the distribution of employees’ salaries among specific activities or cost objectives as required. Condition: During our review of payroll charges to Federal awards, we noted that BCHC did not use timesheets from January 2024 to August 2024 and recorded salaries based on budgeted allocations. In August 2024, timesheets were implemented but we noted that the time recorded in the general ledger did not coincide with the allocation on the actual timesheets. Cause: BCHC relied on predetermined budget estimates for payroll allocation rather than using timesheets that reflected actual hours worked. Effect or Potential Effect: There is a risk that payroll costs charged to Federal programs may not accurately represent the true level of effort, potentially resulting in unallowable costs being charged to Federal awards. Questioned Costs: Indeterminate-The questioned costs relate to salary and wage expenditures charged to Federal programs without the required time and effort documentation in accordance with 2 CFR §200.430. Specifically, employees whose compensation was allocated to Federal awards did not maintain timesheets or equivalent records reflecting actual time worked on specific Federal activities. Due to the absence of these records, we were unable to determine the portion of personnel costs that may be unallowable under Uniform Guidance. Accordingly, the questioned costs are considered indeterminate. Context: We sampled 40 payroll transactions. All transactions were based on budgeted amounts. This issue was observed across all departments receiving Federal funds. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: While BCHC now maintains timesheets, we recommend ensuring that payroll costs charged to Federal awards are based on the actual time recorded, rather than budgeted estimates. The timesheet data should be used to support allocations in accordance with Uniform Guidance, and adjustments should be made as needed to reflect the actual effort expended on Federal programs.
Finding 2024-002 Payroll Information on the Federal Programs: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): 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. These records must support the distribution of employees’ salaries among specific activities or cost objectives as required. Condition: During our review of payroll charges to Federal awards, we noted that BCHC did not use timesheets from January 2024 to August 2024 and recorded salaries based on budgeted allocations. In August 2024, timesheets were implemented but we noted that the time recorded in the general ledger did not coincide with the allocation on the actual timesheets. Cause: BCHC relied on predetermined budget estimates for payroll allocation rather than using timesheets that reflected actual hours worked. Effect or Potential Effect: There is a risk that payroll costs charged to Federal programs may not accurately represent the true level of effort, potentially resulting in unallowable costs being charged to Federal awards. Questioned Costs: Indeterminate-The questioned costs relate to salary and wage expenditures charged to Federal programs without the required time and effort documentation in accordance with 2 CFR §200.430. Specifically, employees whose compensation was allocated to Federal awards did not maintain timesheets or equivalent records reflecting actual time worked on specific Federal activities. Due to the absence of these records, we were unable to determine the portion of personnel costs that may be unallowable under Uniform Guidance. Accordingly, the questioned costs are considered indeterminate. Context: We sampled 40 payroll transactions. All transactions were based on budgeted amounts. This issue was observed across all departments receiving Federal funds. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: While BCHC now maintains timesheets, we recommend ensuring that payroll costs charged to Federal awards are based on the actual time recorded, rather than budgeted estimates. The timesheet data should be used to support allocations in accordance with Uniform Guidance, and adjustments should be made as needed to reflect the actual effort expended on Federal programs.
Finding 2024-002 Payroll Information on the Federal Programs: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): 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. These records must support the distribution of employees’ salaries among specific activities or cost objectives as required. Condition: During our review of payroll charges to Federal awards, we noted that BCHC did not use timesheets from January 2024 to August 2024 and recorded salaries based on budgeted allocations. In August 2024, timesheets were implemented but we noted that the time recorded in the general ledger did not coincide with the allocation on the actual timesheets. Cause: BCHC relied on predetermined budget estimates for payroll allocation rather than using timesheets that reflected actual hours worked. Effect or Potential Effect: There is a risk that payroll costs charged to Federal programs may not accurately represent the true level of effort, potentially resulting in unallowable costs being charged to Federal awards. Questioned Costs: Indeterminate-The questioned costs relate to salary and wage expenditures charged to Federal programs without the required time and effort documentation in accordance with 2 CFR §200.430. Specifically, employees whose compensation was allocated to Federal awards did not maintain timesheets or equivalent records reflecting actual time worked on specific Federal activities. Due to the absence of these records, we were unable to determine the portion of personnel costs that may be unallowable under Uniform Guidance. Accordingly, the questioned costs are considered indeterminate. Context: We sampled 40 payroll transactions. All transactions were based on budgeted amounts. This issue was observed across all departments receiving Federal funds. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: While BCHC now maintains timesheets, we recommend ensuring that payroll costs charged to Federal awards are based on the actual time recorded, rather than budgeted estimates. The timesheet data should be used to support allocations in accordance with Uniform Guidance, and adjustments should be made as needed to reflect the actual effort expended on Federal programs.
Finding 2024-002 Payroll Information on the Federal Programs: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): 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. These records must support the distribution of employees’ salaries among specific activities or cost objectives as required. Condition: During our review of payroll charges to Federal awards, we noted that BCHC did not use timesheets from January 2024 to August 2024 and recorded salaries based on budgeted allocations. In August 2024, timesheets were implemented but we noted that the time recorded in the general ledger did not coincide with the allocation on the actual timesheets. Cause: BCHC relied on predetermined budget estimates for payroll allocation rather than using timesheets that reflected actual hours worked. Effect or Potential Effect: There is a risk that payroll costs charged to Federal programs may not accurately represent the true level of effort, potentially resulting in unallowable costs being charged to Federal awards. Questioned Costs: Indeterminate-The questioned costs relate to salary and wage expenditures charged to Federal programs without the required time and effort documentation in accordance with 2 CFR §200.430. Specifically, employees whose compensation was allocated to Federal awards did not maintain timesheets or equivalent records reflecting actual time worked on specific Federal activities. Due to the absence of these records, we were unable to determine the portion of personnel costs that may be unallowable under Uniform Guidance. Accordingly, the questioned costs are considered indeterminate. Context: We sampled 40 payroll transactions. All transactions were based on budgeted amounts. This issue was observed across all departments receiving Federal funds. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: While BCHC now maintains timesheets, we recommend ensuring that payroll costs charged to Federal awards are based on the actual time recorded, rather than budgeted estimates. The timesheet data should be used to support allocations in accordance with Uniform Guidance, and adjustments should be made as needed to reflect the actual effort expended on Federal programs.
Finding 2024-002 Payroll Information on the Federal Programs: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): 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. These records must support the distribution of employees’ salaries among specific activities or cost objectives as required. Condition: During our review of payroll charges to Federal awards, we noted that BCHC did not use timesheets from January 2024 to August 2024 and recorded salaries based on budgeted allocations. In August 2024, timesheets were implemented but we noted that the time recorded in the general ledger did not coincide with the allocation on the actual timesheets. Cause: BCHC relied on predetermined budget estimates for payroll allocation rather than using timesheets that reflected actual hours worked. Effect or Potential Effect: There is a risk that payroll costs charged to Federal programs may not accurately represent the true level of effort, potentially resulting in unallowable costs being charged to Federal awards. Questioned Costs: Indeterminate-The questioned costs relate to salary and wage expenditures charged to Federal programs without the required time and effort documentation in accordance with 2 CFR §200.430. Specifically, employees whose compensation was allocated to Federal awards did not maintain timesheets or equivalent records reflecting actual time worked on specific Federal activities. Due to the absence of these records, we were unable to determine the portion of personnel costs that may be unallowable under Uniform Guidance. Accordingly, the questioned costs are considered indeterminate. Context: We sampled 40 payroll transactions. All transactions were based on budgeted amounts. This issue was observed across all departments receiving Federal funds. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: While BCHC now maintains timesheets, we recommend ensuring that payroll costs charged to Federal awards are based on the actual time recorded, rather than budgeted estimates. The timesheet data should be used to support allocations in accordance with Uniform Guidance, and adjustments should be made as needed to reflect the actual effort expended on Federal programs.
Finding 2024-002 Payroll Information on the Federal Programs: 93.421 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): 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. These records must support the distribution of employees’ salaries among specific activities or cost objectives as required. Condition: During our review of payroll charges to Federal awards, we noted that BCHC did not use timesheets from January 2024 to August 2024 and recorded salaries based on budgeted allocations. In August 2024, timesheets were implemented but we noted that the time recorded in the general ledger did not coincide with the allocation on the actual timesheets. Cause: BCHC relied on predetermined budget estimates for payroll allocation rather than using timesheets that reflected actual hours worked. Effect or Potential Effect: There is a risk that payroll costs charged to Federal programs may not accurately represent the true level of effort, potentially resulting in unallowable costs being charged to Federal awards. Questioned Costs: Indeterminate-The questioned costs relate to salary and wage expenditures charged to Federal programs without the required time and effort documentation in accordance with 2 CFR §200.430. Specifically, employees whose compensation was allocated to Federal awards did not maintain timesheets or equivalent records reflecting actual time worked on specific Federal activities. Due to the absence of these records, we were unable to determine the portion of personnel costs that may be unallowable under Uniform Guidance. Accordingly, the questioned costs are considered indeterminate. Context: We sampled 40 payroll transactions. All transactions were based on budgeted amounts. This issue was observed across all departments receiving Federal funds. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: While BCHC now maintains timesheets, we recommend ensuring that payroll costs charged to Federal awards are based on the actual time recorded, rather than budgeted estimates. The timesheet data should be used to support allocations in accordance with Uniform Guidance, and adjustments should be made as needed to reflect the actual effort expended on Federal programs.