Department of Health and Human Services, Assistance Listing No. 93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services, 1H79SM083255‐01, 2/15/2022 – 2/14/2023; Assistance Listing No. 93.696, Certified Community Behavioral Health Clinics Expansion Grants, 1H79SM087079‐ 01/1H79SM087007‐01, 9/30/2022 – 9/29/2023 Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Per Uniform Guidance (2 CFR Section 200.430(i), Standards for Documentation of Personnel Expenses) as it relates to federal grants: (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non‐Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR Part 200, OMB Compliance Supplement, defines Level of Effort as follows: Level of effort includes requirements for (a) a specified level of service to be provided from period to period, (b) a specified level of expenditures from non‐federal or federal sources for specified activities to be maintained from period to period, and (c) federal funds to supplement and not supplant non‐federal funding of services Condition: The Center could not readily provide the appropriate documentation to support the allocations of compensation applicable to the referenced programs for actual time worked, or to support allowable costs or that the level of effort requirements, as outlined in the grant contracts, were achieved. Cause: The process used to track employee payroll does not adequately track the allocations of payroll or time worked to the respective activities or federal programs. As a result, certain expenditures were inappropriately claimed as program expenditures, but could not be substantiated for purposes of allowable costs or level of effort. Effect: The Center is at risk for noncompliance with allowable activities and allowable costs, as well as level of effort requirements. Questioned costs: $872,088 in payroll was identified as allowable costs for Section 223, Demonstration Programs to Improve Community Mental Health Services, which could not be substantiated. $1,187,041 in payroll was identified as allowable costs for Certified Community Behavioral Health Clinics Expansion Grants, which could not be substantiated. Context: A nonstatistical sampling of 40 out of over 14,000 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Section 223, Demonstration Programs to Improve Community Mental Health Services, which accounted for $114,123 of $1,187,041 total program expenditures. 2 of 2 employees were tested with respect to level of effort requirements as outlined in the program contract, but supporting information could not be provided. A nonstatistical sampling of 25 out of 206 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Certified Community Behavioral Health Clinics Expansion Grants, which accounted for $139,829 of $910,628 total program expenditures. 4 of 4 employees were tested with respect to level of effort requirements as outlined in the program contracts, but supporting information could not be provided. Repeat Finding From Prior Year: No Recommendation: Controls should be put in place to ensure that expenditures of program funds allocated through payroll expense are reviewed and approved by program management and are properly allocated based on time and activities worked consistent with the grant requirements. Additionally, level of effort requirements as made known in grant contracts should be substantiated by payroll allocation or other records. Views of Responsible Officials: We agree with the finding. See additional response in the Corrective Action Plan.
Department of Health and Human Services, Assistance Listing No. 93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services, 1H79SM083255‐01, 2/15/2022 – 2/14/2023; Assistance Listing No. 93.696, Certified Community Behavioral Health Clinics Expansion Grants, 1H79SM087079‐ 01/1H79SM087007‐01, 9/30/2022 – 9/29/2023 Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Per Uniform Guidance (2 CFR Section 200.430(i), Standards for Documentation of Personnel Expenses) as it relates to federal grants: (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non‐Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR Part 200, OMB Compliance Supplement, defines Level of Effort as follows: Level of effort includes requirements for (a) a specified level of service to be provided from period to period, (b) a specified level of expenditures from non‐federal or federal sources for specified activities to be maintained from period to period, and (c) federal funds to supplement and not supplant non‐federal funding of services Condition: The Center could not readily provide the appropriate documentation to support the allocations of compensation applicable to the referenced programs for actual time worked, or to support allowable costs or that the level of effort requirements, as outlined in the grant contracts, were achieved. Cause: The process used to track employee payroll does not adequately track the allocations of payroll or time worked to the respective activities or federal programs. As a result, certain expenditures were inappropriately claimed as program expenditures, but could not be substantiated for purposes of allowable costs or level of effort. Effect: The Center is at risk for noncompliance with allowable activities and allowable costs, as well as level of effort requirements. Questioned costs: $872,088 in payroll was identified as allowable costs for Section 223, Demonstration Programs to Improve Community Mental Health Services, which could not be substantiated. $1,187,041 in payroll was identified as allowable costs for Certified Community Behavioral Health Clinics Expansion Grants, which could not be substantiated. Context: A nonstatistical sampling of 40 out of over 14,000 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Section 223, Demonstration Programs to Improve Community Mental Health Services, which accounted for $114,123 of $1,187,041 total program expenditures. 2 of 2 employees were tested with respect to level of effort requirements as outlined in the program contract, but supporting information could not be provided. A nonstatistical sampling of 25 out of 206 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Certified Community Behavioral Health Clinics Expansion Grants, which accounted for $139,829 of $910,628 total program expenditures. 4 of 4 employees were tested with respect to level of effort requirements as outlined in the program contracts, but supporting information could not be provided. Repeat Finding From Prior Year: No Recommendation: Controls should be put in place to ensure that expenditures of program funds allocated through payroll expense are reviewed and approved by program management and are properly allocated based on time and activities worked consistent with the grant requirements. Additionally, level of effort requirements as made known in grant contracts should be substantiated by payroll allocation or other records. Views of Responsible Officials: We agree with the finding. See additional response in the Corrective Action Plan.
Department of Health and Human Services, Assistance Listing No. 93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services, 1H79SM083255‐01, 2/15/2022 – 2/14/2023; Assistance Listing No. 93.696, Certified Community Behavioral Health Clinics Expansion Grants, 1H79SM087079‐ 01/1H79SM087007‐01, 9/30/2022 – 9/29/2023 Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Per Uniform Guidance (2 CFR Section 200.430(i), Standards for Documentation of Personnel Expenses) as it relates to federal grants: (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non‐Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR Part 200, OMB Compliance Supplement, defines Level of Effort as follows: Level of effort includes requirements for (a) a specified level of service to be provided from period to period, (b) a specified level of expenditures from non‐federal or federal sources for specified activities to be maintained from period to period, and (c) federal funds to supplement and not supplant non‐federal funding of services Condition: The Center could not readily provide the appropriate documentation to support the allocations of compensation applicable to the referenced programs for actual time worked, or to support allowable costs or that the level of effort requirements, as outlined in the grant contracts, were achieved. Cause: The process used to track employee payroll does not adequately track the allocations of payroll or time worked to the respective activities or federal programs. As a result, certain expenditures were inappropriately claimed as program expenditures, but could not be substantiated for purposes of allowable costs or level of effort. Effect: The Center is at risk for noncompliance with allowable activities and allowable costs, as well as level of effort requirements. Questioned costs: $872,088 in payroll was identified as allowable costs for Section 223, Demonstration Programs to Improve Community Mental Health Services, which could not be substantiated. $1,187,041 in payroll was identified as allowable costs for Certified Community Behavioral Health Clinics Expansion Grants, which could not be substantiated. Context: A nonstatistical sampling of 40 out of over 14,000 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Section 223, Demonstration Programs to Improve Community Mental Health Services, which accounted for $114,123 of $1,187,041 total program expenditures. 2 of 2 employees were tested with respect to level of effort requirements as outlined in the program contract, but supporting information could not be provided. A nonstatistical sampling of 25 out of 206 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Certified Community Behavioral Health Clinics Expansion Grants, which accounted for $139,829 of $910,628 total program expenditures. 4 of 4 employees were tested with respect to level of effort requirements as outlined in the program contracts, but supporting information could not be provided. Repeat Finding From Prior Year: No Recommendation: Controls should be put in place to ensure that expenditures of program funds allocated through payroll expense are reviewed and approved by program management and are properly allocated based on time and activities worked consistent with the grant requirements. Additionally, level of effort requirements as made known in grant contracts should be substantiated by payroll allocation or other records. Views of Responsible Officials: We agree with the finding. See additional response in the Corrective Action Plan.
2023‐004 – Activities Allowed, Allowable Costs over Payroll (Material Noncompliance, Material Weakness over Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: Airport Improvement Program, 20.106 Federal Awarding Agency: Department of Transportation, Federal Aviation Administration Federal Award ID Number: SAF‐SWG‐3‐35‐0037‐057‐2021 Federal Award Year: 2023 Condition: During reconciliation of the general ledger to the SEFA, it was noted multiple pay periods were duplicated which were included in request for reimbursement. Criteria: Per 2 CFR 200.303(a), 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). Per 2 CFR section 200.430(f) – Factors affecting allowability of costs ‐ Not be included as a cost or used to meet cost sharing or matching requirements of any other federally‐financed program in either the current or a prior period. Cause: The City does not have sufficient controls in place to ensure the accuracy of the amounts listed on the general ledger as charged to the grant. Questioned Cost: Known and likely questioned costs of $86,333 Effect: The City requested reimbursement for duplicate transactions resulting in disallowed costs.
2023‐004 – Activities Allowed, Allowable Costs over Payroll (Material Noncompliance, Material Weakness over Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: Airport Improvement Program, 20.106 Federal Awarding Agency: Department of Transportation, Federal Aviation Administration Federal Award ID Number: SAF‐SWG‐3‐35‐0037‐057‐2021 Federal Award Year: 2023 Condition: During reconciliation of the general ledger to the SEFA, it was noted multiple pay periods were duplicated which were included in request for reimbursement. Criteria: Per 2 CFR 200.303(a), 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). Per 2 CFR section 200.430(f) – Factors affecting allowability of costs ‐ Not be included as a cost or used to meet cost sharing or matching requirements of any other federally‐financed program in either the current or a prior period. Cause: The City does not have sufficient controls in place to ensure the accuracy of the amounts listed on the general ledger as charged to the grant. Questioned Cost: Known and likely questioned costs of $86,333 Effect: The City requested reimbursement for duplicate transactions resulting in disallowed costs.
2023‐004 – Activities Allowed, Allowable Costs over Payroll (Material Noncompliance, Material Weakness over Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: Airport Improvement Program, 20.106 Federal Awarding Agency: Department of Transportation, Federal Aviation Administration Federal Award ID Number: SAF‐SWG‐3‐35‐0037‐057‐2021 Federal Award Year: 2023 Condition: During reconciliation of the general ledger to the SEFA, it was noted multiple pay periods were duplicated which were included in request for reimbursement. Criteria: Per 2 CFR 200.303(a), 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). Per 2 CFR section 200.430(f) – Factors affecting allowability of costs ‐ Not be included as a cost or used to meet cost sharing or matching requirements of any other federally‐financed program in either the current or a prior period. Cause: The City does not have sufficient controls in place to ensure the accuracy of the amounts listed on the general ledger as charged to the grant. Questioned Cost: Known and likely questioned costs of $86,333 Effect: The City requested reimbursement for duplicate transactions resulting in disallowed costs.
2023‐004 – Activities Allowed, Allowable Costs over Payroll (Material Noncompliance, Material Weakness over Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: Airport Improvement Program, 20.106 Federal Awarding Agency: Department of Transportation, Federal Aviation Administration Federal Award ID Number: SAF‐SWG‐3‐35‐0037‐057‐2021 Federal Award Year: 2023 Condition: During reconciliation of the general ledger to the SEFA, it was noted multiple pay periods were duplicated which were included in request for reimbursement. Criteria: Per 2 CFR 200.303(a), 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). Per 2 CFR section 200.430(f) – Factors affecting allowability of costs ‐ Not be included as a cost or used to meet cost sharing or matching requirements of any other federally‐financed program in either the current or a prior period. Cause: The City does not have sufficient controls in place to ensure the accuracy of the amounts listed on the general ledger as charged to the grant. Questioned Cost: Known and likely questioned costs of $86,333 Effect: The City requested reimbursement for duplicate transactions resulting in disallowed costs.
Reference Number: 2023-010 Prior Year Finding: 2022-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster, Employment Service Cluster Assistance Listing Number: 17.258, 17.259, 17.278, 17.207, 17.801 Award Number and Year: AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 – 6/30/2023) ES333991955A25 (7/1/2019 – 9/30/2022), ES353492055A25 (7/1/2020 – 9/30/2023), ES367612155A25 (7/1/2021 – 9/30/2024), ES387362255A25 (7/1/2022 – 9/30/2025) DV357862155525 (10/1/2020 – 12/31/2022), DV378592255525 (10/1/2021 – 12/31/2023), 23555DV000008 (10/1/2022 – 12/31/2024) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, • Be incorporated into the official records of the non-Federal entity, • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, • Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, • Comply with the established accounting policies and practices of the non-Federal entity, • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: Combination codes are used by employees to allocate and certify hours worked to Federal grants and employees’ supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system defaults to budgeted grant allocations entered into the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). Sixty timesheets were selected for testing for the WIOA Cluster. Two of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee’s actual time and effort on the program. Sixty timesheets were selected for testing for the Employment Service Cluster (ESC). The following exceptions were noted: • Seven of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee’s actual time and effort on the program. • Two of sixty employee timesheets selected for testing charged costs to the program that did not relate to the ESC grant program. Cause: The Department’s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Noncompliance occurred as payroll charges allocated to the grants were not reflective of actual activity for which the employees were compensated. Additionally, unallowable costs were charged to the ESC grant program through the use of combination codes not associated with the program. Questioned costs: WIOA: Undetermined amount related to budgeted combination codes. ESC: $5,524, the amount charged to an unallowable combination code. Undetermined amount related to budgeted combination codes. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort and a combination code that is allowable under the program. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-010 Prior Year Finding: 2022-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster, Employment Service Cluster Assistance Listing Number: 17.258, 17.259, 17.278, 17.207, 17.801 Award Number and Year: AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 – 6/30/2023) ES333991955A25 (7/1/2019 – 9/30/2022), ES353492055A25 (7/1/2020 – 9/30/2023), ES367612155A25 (7/1/2021 – 9/30/2024), ES387362255A25 (7/1/2022 – 9/30/2025) DV357862155525 (10/1/2020 – 12/31/2022), DV378592255525 (10/1/2021 – 12/31/2023), 23555DV000008 (10/1/2022 – 12/31/2024) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, • Be incorporated into the official records of the non-Federal entity, • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, • Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, • Comply with the established accounting policies and practices of the non-Federal entity, • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: Combination codes are used by employees to allocate and certify hours worked to Federal grants and employees’ supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system defaults to budgeted grant allocations entered into the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). Sixty timesheets were selected for testing for the WIOA Cluster. Two of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee’s actual time and effort on the program. Sixty timesheets were selected for testing for the Employment Service Cluster (ESC). The following exceptions were noted: • Seven of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee’s actual time and effort on the program. • Two of sixty employee timesheets selected for testing charged costs to the program that did not relate to the ESC grant program. Cause: The Department’s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Noncompliance occurred as payroll charges allocated to the grants were not reflective of actual activity for which the employees were compensated. Additionally, unallowable costs were charged to the ESC grant program through the use of combination codes not associated with the program. Questioned costs: WIOA: Undetermined amount related to budgeted combination codes. ESC: $5,524, the amount charged to an unallowable combination code. Undetermined amount related to budgeted combination codes. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort and a combination code that is allowable under the program. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-010 Prior Year Finding: 2022-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster, Employment Service Cluster Assistance Listing Number: 17.258, 17.259, 17.278, 17.207, 17.801 Award Number and Year: AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 – 6/30/2023) ES333991955A25 (7/1/2019 – 9/30/2022), ES353492055A25 (7/1/2020 – 9/30/2023), ES367612155A25 (7/1/2021 – 9/30/2024), ES387362255A25 (7/1/2022 – 9/30/2025) DV357862155525 (10/1/2020 – 12/31/2022), DV378592255525 (10/1/2021 – 12/31/2023), 23555DV000008 (10/1/2022 – 12/31/2024) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, • Be incorporated into the official records of the non-Federal entity, • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, • Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, • Comply with the established accounting policies and practices of the non-Federal entity, • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: Combination codes are used by employees to allocate and certify hours worked to Federal grants and employees’ supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system defaults to budgeted grant allocations entered into the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). Sixty timesheets were selected for testing for the WIOA Cluster. Two of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee’s actual time and effort on the program. Sixty timesheets were selected for testing for the Employment Service Cluster (ESC). The following exceptions were noted: • Seven of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee’s actual time and effort on the program. • Two of sixty employee timesheets selected for testing charged costs to the program that did not relate to the ESC grant program. Cause: The Department’s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Noncompliance occurred as payroll charges allocated to the grants were not reflective of actual activity for which the employees were compensated. Additionally, unallowable costs were charged to the ESC grant program through the use of combination codes not associated with the program. Questioned costs: WIOA: Undetermined amount related to budgeted combination codes. ESC: $5,524, the amount charged to an unallowable combination code. Undetermined amount related to budgeted combination codes. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort and a combination code that is allowable under the program. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-010 Prior Year Finding: 2022-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster, Employment Service Cluster Assistance Listing Number: 17.258, 17.259, 17.278, 17.207, 17.801 Award Number and Year: AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 – 6/30/2023) ES333991955A25 (7/1/2019 – 9/30/2022), ES353492055A25 (7/1/2020 – 9/30/2023), ES367612155A25 (7/1/2021 – 9/30/2024), ES387362255A25 (7/1/2022 – 9/30/2025) DV357862155525 (10/1/2020 – 12/31/2022), DV378592255525 (10/1/2021 – 12/31/2023), 23555DV000008 (10/1/2022 – 12/31/2024) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, • Be incorporated into the official records of the non-Federal entity, • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, • Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, • Comply with the established accounting policies and practices of the non-Federal entity, • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: Combination codes are used by employees to allocate and certify hours worked to Federal grants and employees’ supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system defaults to budgeted grant allocations entered into the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). Sixty timesheets were selected for testing for the WIOA Cluster. Two of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee’s actual time and effort on the program. Sixty timesheets were selected for testing for the Employment Service Cluster (ESC). The following exceptions were noted: • Seven of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee’s actual time and effort on the program. • Two of sixty employee timesheets selected for testing charged costs to the program that did not relate to the ESC grant program. Cause: The Department’s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Noncompliance occurred as payroll charges allocated to the grants were not reflective of actual activity for which the employees were compensated. Additionally, unallowable costs were charged to the ESC grant program through the use of combination codes not associated with the program. Questioned costs: WIOA: Undetermined amount related to budgeted combination codes. ESC: $5,524, the amount charged to an unallowable combination code. Undetermined amount related to budgeted combination codes. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort and a combination code that is allowable under the program. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-010 Prior Year Finding: 2022-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster, Employment Service Cluster Assistance Listing Number: 17.258, 17.259, 17.278, 17.207, 17.801 Award Number and Year: AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 – 6/30/2023) ES333991955A25 (7/1/2019 – 9/30/2022), ES353492055A25 (7/1/2020 – 9/30/2023), ES367612155A25 (7/1/2021 – 9/30/2024), ES387362255A25 (7/1/2022 – 9/30/2025) DV357862155525 (10/1/2020 – 12/31/2022), DV378592255525 (10/1/2021 – 12/31/2023), 23555DV000008 (10/1/2022 – 12/31/2024) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, • Be incorporated into the official records of the non-Federal entity, • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, • Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, • Comply with the established accounting policies and practices of the non-Federal entity, • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: Combination codes are used by employees to allocate and certify hours worked to Federal grants and employees’ supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system defaults to budgeted grant allocations entered into the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). Sixty timesheets were selected for testing for the WIOA Cluster. Two of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee’s actual time and effort on the program. Sixty timesheets were selected for testing for the Employment Service Cluster (ESC). The following exceptions were noted: • Seven of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee’s actual time and effort on the program. • Two of sixty employee timesheets selected for testing charged costs to the program that did not relate to the ESC grant program. Cause: The Department’s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Noncompliance occurred as payroll charges allocated to the grants were not reflective of actual activity for which the employees were compensated. Additionally, unallowable costs were charged to the ESC grant program through the use of combination codes not associated with the program. Questioned costs: WIOA: Undetermined amount related to budgeted combination codes. ESC: $5,524, the amount charged to an unallowable combination code. Undetermined amount related to budgeted combination codes. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort and a combination code that is allowable under the program. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2023-034 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Public Health (DPH) Department: Dukes County Sheriff’s Office Federal Program: Opioid-STR Assistance Listing Number: 93.788 Award Number and Year: 1H79TI083328 (9/30/2020 – 9/29/2021) 5H79TI083328 (9/30/2021 – 9/29/2022) 6H79TI083328 (9/30/2021 – 9/29/2023) 1H79TI085778 (9/30/2021 – 9/29/2023) Compliance Requirement: Allowable Cost/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 2 CFR Section 200.430(I)(1) Standards for Documentation of Personnel Expenses states that: 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; (vi) Reserved (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Dukes County Sheriff’s Office (Department) was unable to provide supporting documentation for salaries and wages charged to the program and charged salaries and wages to the program that did not agree with supporting documentation. Context: Forty timesheets were selected for testing and the following exceptions were noted: • For 1 of 40 timesheets, the Department was unable to provide documentation that the timesheet had been reviewed and approved by the employee’s supervisor. • For 2 of 40 timesheets, the Department was unable to provide supporting documentation for the time and effort charged to the program. • For 4 of 40 timesheets, 100% of the employees’ time and effort was charged to the program, but supporting documentation indicated that actual time worked on the program was less than 100%. Questioned costs: $7,587, which represents the amount charged to the program for which supporting documentation was unavailable. $5,383, which represents the difference between the supporting documentation and the amounts charged to the program. Cause: Controls were not operating effectively to ensure that time and effort reporting was performed and documented in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Recommendation: We recommend the Department enhance its procedures and internal controls, perform additional training over time and effort reporting, and ensure that documentation is maintained and readily available for audit. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of Responsible Officials: Management agrees with the finding.
Criteria 2 CFR 200.303 establish that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.430 establishes that the cost of compensation for personnel services is allowable to the extent that it follows an appointment made in accordance with the governmental unit's laws and rules and meets the merit system or other requirements required by federal law, where applicable. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation-fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. (i) The Non-Federal entity establishes consistent written policies which apply uniformly to all faculty members, not just those working on Federal awards. Condition a. During our audit, on a sample of sixty (60) personnel files, we observed that the personnel files are not being kept current and in some instances were incomplete. b. The PRDH does not have established written policies and manuals which can define standard internal controls for each program and/ or region of the entity. Cause PRDH has not established an effective internal control designed to ensure the accuracy and completeness of the employee files. Also, the incompleteness of the files may depend on the time that the employee started working in the agency. Effect Due to law and regulation changes, incomplete files may result in inadequate documentation to support compliance with the criteria over management and administration of personnel files. Also, in the case of employees paid with federal funds it may result in cost disallowances for personnel that do not meet the requirements to be employed by the corresponding federal program. Questioned Costs None Perspective Information Finding does not represent a significant problem. The Department has addressed this finding and it's been taking the steps necessary to reduce incidences to a minimum. We selected 60 employee files from the agency. Prior Year Audit Finding 2022-002 Recommendation PRDH should immediately undertake a process to review all personnel files and validate that the minimum requirement documents are appropriately completed and included in each personnel file. Also, the PRDH must update the salary change form in file in order to reflect current salary as stated in the digital information system. Views of Responsible Officials The PRDOH agrees with the finding. However, PRDOH has implemented several corrective actions. The PRDOH established an internal control to ensure that the required documents are recorded in the files. The Director of Human Resources presented a work plan, in order to implement an effective procedure for reviewing files. A control sheet of documents required to the active records was established in which the Human Resources Officers of the regions and Hospital were requested to verify the employee's files for the required documentation that is need it in the files. Responsible Officials Ledo. Luis Rivera Villanueva Mrs. Luz S. Ramos Pedroza Mrs. Maribel Zayas Estimated Completion Date Sec. Auxiliar de Recursos Humanos Specialist Payroll Officer Director 787-765-2929 ext. 4273 787-765-2929 ext. 4273 787-765-2929 ext. 4209 Implementation is expected to be completed on or before the end of October 2024.
Criteria 2 CFR 200.303 establish that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.430 establishes that the cost of compensation for personnel services is allowable to the extent that it follows an appointment made in accordance with the governmental unit's laws and rules and meets the merit system or other requirements required by federal law, where applicable. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation-fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. (i) The Non-Federal entity establishes consistent written policies which apply uniformly to all faculty members, not just those working on Federal awards. Condition a. During our audit, on a sample of sixty (60) personnel files, we observed that the personnel files are not being kept current and in some instances were incomplete. b. The PRDH does not have established written policies and manuals which can define standard internal controls for each program and/ or region of the entity. Cause PRDH has not established an effective internal control designed to ensure the accuracy and completeness of the employee files. Also, the incompleteness of the files may depend on the time that the employee started working in the agency. Effect Due to law and regulation changes, incomplete files may result in inadequate documentation to support compliance with the criteria over management and administration of personnel files. Also, in the case of employees paid with federal funds it may result in cost disallowances for personnel that do not meet the requirements to be employed by the corresponding federal program. Questioned Costs None Perspective Information Finding does not represent a significant problem. The Department has addressed this finding and it's been taking the steps necessary to reduce incidences to a minimum. We selected 60 employee files from the agency. Prior Year Audit Finding 2022-002 Recommendation PRDH should immediately undertake a process to review all personnel files and validate that the minimum requirement documents are appropriately completed and included in each personnel file. Also, the PRDH must update the salary change form in file in order to reflect current salary as stated in the digital information system. Views of Responsible Officials The PRDOH agrees with the finding. However, PRDOH has implemented several corrective actions. The PRDOH established an internal control to ensure that the required documents are recorded in the files. The Director of Human Resources presented a work plan, in order to implement an effective procedure for reviewing files. A control sheet of documents required to the active records was established in which the Human Resources Officers of the regions and Hospital were requested to verify the employee's files for the required documentation that is need it in the files. Responsible Officials Ledo. Luis Rivera Villanueva Mrs. Luz S. Ramos Pedroza Mrs. Maribel Zayas Estimated Completion Date Sec. Auxiliar de Recursos Humanos Specialist Payroll Officer Director 787-765-2929 ext. 4273 787-765-2929 ext. 4273 787-765-2929 ext. 4209 Implementation is expected to be completed on or before the end of October 2024.
Criteria 2 CFR 200.303 establish that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.430 establishes that the cost of compensation for personnel services is allowable to the extent that it follows an appointment made in accordance with the governmental unit's laws and rules and meets the merit system or other requirements required by federal law, where applicable. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation-fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. (i) The Non-Federal entity establishes consistent written policies which apply uniformly to all faculty members, not just those working on Federal awards. Condition a. During our audit, on a sample of sixty (60) personnel files, we observed that the personnel files are not being kept current and in some instances were incomplete. b. The PRDH does not have established written policies and manuals which can define standard internal controls for each program and/ or region of the entity. Cause PRDH has not established an effective internal control designed to ensure the accuracy and completeness of the employee files. Also, the incompleteness of the files may depend on the time that the employee started working in the agency. Effect Due to law and regulation changes, incomplete files may result in inadequate documentation to support compliance with the criteria over management and administration of personnel files. Also, in the case of employees paid with federal funds it may result in cost disallowances for personnel that do not meet the requirements to be employed by the corresponding federal program. Questioned Costs None Perspective Information Finding does not represent a significant problem. The Department has addressed this finding and it's been taking the steps necessary to reduce incidences to a minimum. We selected 60 employee files from the agency. Prior Year Audit Finding 2022-002 Recommendation PRDH should immediately undertake a process to review all personnel files and validate that the minimum requirement documents are appropriately completed and included in each personnel file. Also, the PRDH must update the salary change form in file in order to reflect current salary as stated in the digital information system. Views of Responsible Officials The PRDOH agrees with the finding. However, PRDOH has implemented several corrective actions. The PRDOH established an internal control to ensure that the required documents are recorded in the files. The Director of Human Resources presented a work plan, in order to implement an effective procedure for reviewing files. A control sheet of documents required to the active records was established in which the Human Resources Officers of the regions and Hospital were requested to verify the employee's files for the required documentation that is need it in the files. Responsible Officials Ledo. Luis Rivera Villanueva Mrs. Luz S. Ramos Pedroza Mrs. Maribel Zayas Estimated Completion Date Sec. Auxiliar de Recursos Humanos Specialist Payroll Officer Director 787-765-2929 ext. 4273 787-765-2929 ext. 4273 787-765-2929 ext. 4209 Implementation is expected to be completed on or before the end of October 2024.
Criteria 2 CFR 200.303 establish that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.430 establishes that the cost of compensation for personnel services is allowable to the extent that it follows an appointment made in accordance with the governmental unit's laws and rules and meets the merit system or other requirements required by federal law, where applicable. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation-fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. (i) The Non-Federal entity establishes consistent written policies which apply uniformly to all faculty members, not just those working on Federal awards. Condition a. During our audit, on a sample of sixty (60) personnel files, we observed that the personnel files are not being kept current and in some instances were incomplete. b. The PRDH does not have established written policies and manuals which can define standard internal controls for each program and/ or region of the entity. Cause PRDH has not established an effective internal control designed to ensure the accuracy and completeness of the employee files. Also, the incompleteness of the files may depend on the time that the employee started working in the agency. Effect Due to law and regulation changes, incomplete files may result in inadequate documentation to support compliance with the criteria over management and administration of personnel files. Also, in the case of employees paid with federal funds it may result in cost disallowances for personnel that do not meet the requirements to be employed by the corresponding federal program. Questioned Costs None Perspective Information Finding does not represent a significant problem. The Department has addressed this finding and it's been taking the steps necessary to reduce incidences to a minimum. We selected 60 employee files from the agency. Prior Year Audit Finding 2022-002 Recommendation PRDH should immediately undertake a process to review all personnel files and validate that the minimum requirement documents are appropriately completed and included in each personnel file. Also, the PRDH must update the salary change form in file in order to reflect current salary as stated in the digital information system. Views of Responsible Officials The PRDOH agrees with the finding. However, PRDOH has implemented several corrective actions. The PRDOH established an internal control to ensure that the required documents are recorded in the files. The Director of Human Resources presented a work plan, in order to implement an effective procedure for reviewing files. A control sheet of documents required to the active records was established in which the Human Resources Officers of the regions and Hospital were requested to verify the employee's files for the required documentation that is need it in the files. Responsible Officials Ledo. Luis Rivera Villanueva Mrs. Luz S. Ramos Pedroza Mrs. Maribel Zayas Estimated Completion Date Sec. Auxiliar de Recursos Humanos Specialist Payroll Officer Director 787-765-2929 ext. 4273 787-765-2929 ext. 4273 787-765-2929 ext. 4209 Implementation is expected to be completed on or before the end of October 2024.
Criteria 2 CFR 200.303 establish that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.430 establishes that the cost of compensation for personnel services is allowable to the extent that it follows an appointment made in accordance with the governmental unit's laws and rules and meets the merit system or other requirements required by federal law, where applicable. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation-fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. (i) The Non-Federal entity establishes consistent written policies which apply uniformly to all faculty members, not just those working on Federal awards. Condition a. During our audit, on a sample of sixty (60) personnel files, we observed that the personnel files are not being kept current and in some instances were incomplete. b. The PRDH does not have established written policies and manuals which can define standard internal controls for each program and/ or region of the entity. Cause PRDH has not established an effective internal control designed to ensure the accuracy and completeness of the employee files. Also, the incompleteness of the files may depend on the time that the employee started working in the agency. Effect Due to law and regulation changes, incomplete files may result in inadequate documentation to support compliance with the criteria over management and administration of personnel files. Also, in the case of employees paid with federal funds it may result in cost disallowances for personnel that do not meet the requirements to be employed by the corresponding federal program. Questioned Costs None Perspective Information Finding does not represent a significant problem. The Department has addressed this finding and it's been taking the steps necessary to reduce incidences to a minimum. We selected 60 employee files from the agency. Prior Year Audit Finding 2022-002 Recommendation PRDH should immediately undertake a process to review all personnel files and validate that the minimum requirement documents are appropriately completed and included in each personnel file. Also, the PRDH must update the salary change form in file in order to reflect current salary as stated in the digital information system. Views of Responsible Officials The PRDOH agrees with the finding. However, PRDOH has implemented several corrective actions. The PRDOH established an internal control to ensure that the required documents are recorded in the files. The Director of Human Resources presented a work plan, in order to implement an effective procedure for reviewing files. A control sheet of documents required to the active records was established in which the Human Resources Officers of the regions and Hospital were requested to verify the employee's files for the required documentation that is need it in the files. Responsible Officials Ledo. Luis Rivera Villanueva Mrs. Luz S. Ramos Pedroza Mrs. Maribel Zayas Estimated Completion Date Sec. Auxiliar de Recursos Humanos Specialist Payroll Officer Director 787-765-2929 ext. 4273 787-765-2929 ext. 4273 787-765-2929 ext. 4209 Implementation is expected to be completed on or before the end of October 2024.
Criteria 2 CFR 200.303 establish that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.430 establishes that the cost of compensation for personnel services is allowable to the extent that it follows an appointment made in accordance with the governmental unit's laws and rules and meets the merit system or other requirements required by federal law, where applicable. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation-fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. (i) The Non-Federal entity establishes consistent written policies which apply uniformly to all faculty members, not just those working on Federal awards. Condition a. During our audit, on a sample of sixty (60) personnel files, we observed that the personnel files are not being kept current and in some instances were incomplete. b. The PRDH does not have established written policies and manuals which can define standard internal controls for each program and/ or region of the entity. Cause PRDH has not established an effective internal control designed to ensure the accuracy and completeness of the employee files. Also, the incompleteness of the files may depend on the time that the employee started working in the agency. Effect Due to law and regulation changes, incomplete files may result in inadequate documentation to support compliance with the criteria over management and administration of personnel files. Also, in the case of employees paid with federal funds it may result in cost disallowances for personnel that do not meet the requirements to be employed by the corresponding federal program. Questioned Costs None Perspective Information Finding does not represent a significant problem. The Department has addressed this finding and it's been taking the steps necessary to reduce incidences to a minimum. We selected 60 employee files from the agency. Prior Year Audit Finding 2022-002 Recommendation PRDH should immediately undertake a process to review all personnel files and validate that the minimum requirement documents are appropriately completed and included in each personnel file. Also, the PRDH must update the salary change form in file in order to reflect current salary as stated in the digital information system. Views of Responsible Officials The PRDOH agrees with the finding. However, PRDOH has implemented several corrective actions. The PRDOH established an internal control to ensure that the required documents are recorded in the files. The Director of Human Resources presented a work plan, in order to implement an effective procedure for reviewing files. A control sheet of documents required to the active records was established in which the Human Resources Officers of the regions and Hospital were requested to verify the employee's files for the required documentation that is need it in the files. Responsible Officials Ledo. Luis Rivera Villanueva Mrs. Luz S. Ramos Pedroza Mrs. Maribel Zayas Estimated Completion Date Sec. Auxiliar de Recursos Humanos Specialist Payroll Officer Director 787-765-2929 ext. 4273 787-765-2929 ext. 4273 787-765-2929 ext. 4209 Implementation is expected to be completed on or before the end of October 2024.
Criteria 2 CFR 200.303 establish that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.430 establishes that the cost of compensation for personnel services is allowable to the extent that it follows an appointment made in accordance with the governmental unit's laws and rules and meets the merit system or other requirements required by federal law, where applicable. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation-fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. (i) The Non-Federal entity establishes consistent written policies which apply uniformly to all faculty members, not just those working on Federal awards. Condition a. During our audit, on a sample of sixty (60) personnel files, we observed that the personnel files are not being kept current and in some instances were incomplete. b. The PRDH does not have established written policies and manuals which can define standard internal controls for each program and/ or region of the entity. Cause PRDH has not established an effective internal control designed to ensure the accuracy and completeness of the employee files. Also, the incompleteness of the files may depend on the time that the employee started working in the agency. Effect Due to law and regulation changes, incomplete files may result in inadequate documentation to support compliance with the criteria over management and administration of personnel files. Also, in the case of employees paid with federal funds it may result in cost disallowances for personnel that do not meet the requirements to be employed by the corresponding federal program. Questioned Costs None Perspective Information Finding does not represent a significant problem. The Department has addressed this finding and it's been taking the steps necessary to reduce incidences to a minimum. We selected 60 employee files from the agency. Prior Year Audit Finding 2022-002 Recommendation PRDH should immediately undertake a process to review all personnel files and validate that the minimum requirement documents are appropriately completed and included in each personnel file. Also, the PRDH must update the salary change form in file in order to reflect current salary as stated in the digital information system. Views of Responsible Officials The PRDOH agrees with the finding. However, PRDOH has implemented several corrective actions. The PRDOH established an internal control to ensure that the required documents are recorded in the files. The Director of Human Resources presented a work plan, in order to implement an effective procedure for reviewing files. A control sheet of documents required to the active records was established in which the Human Resources Officers of the regions and Hospital were requested to verify the employee's files for the required documentation that is need it in the files. Responsible Officials Ledo. Luis Rivera Villanueva Mrs. Luz S. Ramos Pedroza Mrs. Maribel Zayas Estimated Completion Date Sec. Auxiliar de Recursos Humanos Specialist Payroll Officer Director 787-765-2929 ext. 4273 787-765-2929 ext. 4273 787-765-2929 ext. 4209 Implementation is expected to be completed on or before the end of October 2024.
Criteria 2 CFR 200.303 establish that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.430 establishes that the cost of compensation for personnel services is allowable to the extent that it follows an appointment made in accordance with the governmental unit's laws and rules and meets the merit system or other requirements required by federal law, where applicable. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation-fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. (i) The Non-Federal entity establishes consistent written policies which apply uniformly to all faculty members, not just those working on Federal awards. Condition a. During our audit, on a sample of sixty (60) personnel files, we observed that the personnel files are not being kept current and in some instances were incomplete. b. The PRDH does not have established written policies and manuals which can define standard internal controls for each program and/ or region of the entity. Cause PRDH has not established an effective internal control designed to ensure the accuracy and completeness of the employee files. Also, the incompleteness of the files may depend on the time that the employee started working in the agency. Effect Due to law and regulation changes, incomplete files may result in inadequate documentation to support compliance with the criteria over management and administration of personnel files. Also, in the case of employees paid with federal funds it may result in cost disallowances for personnel that do not meet the requirements to be employed by the corresponding federal program. Questioned Costs None Perspective Information Finding does not represent a significant problem. The Department has addressed this finding and it's been taking the steps necessary to reduce incidences to a minimum. We selected 60 employee files from the agency. Prior Year Audit Finding 2022-002 Recommendation PRDH should immediately undertake a process to review all personnel files and validate that the minimum requirement documents are appropriately completed and included in each personnel file. Also, the PRDH must update the salary change form in file in order to reflect current salary as stated in the digital information system. Views of Responsible Officials The PRDOH agrees with the finding. However, PRDOH has implemented several corrective actions. The PRDOH established an internal control to ensure that the required documents are recorded in the files. The Director of Human Resources presented a work plan, in order to implement an effective procedure for reviewing files. A control sheet of documents required to the active records was established in which the Human Resources Officers of the regions and Hospital were requested to verify the employee's files for the required documentation that is need it in the files. Responsible Officials Ledo. Luis Rivera Villanueva Mrs. Luz S. Ramos Pedroza Mrs. Maribel Zayas Estimated Completion Date Sec. Auxiliar de Recursos Humanos Specialist Payroll Officer Director 787-765-2929 ext. 4273 787-765-2929 ext. 4273 787-765-2929 ext. 4209 Implementation is expected to be completed on or before the end of October 2024.
Criteria 2 CFR 200.303 establish that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.430 establishes that the cost of compensation for personnel services is allowable to the extent that it follows an appointment made in accordance with the governmental unit's laws and rules and meets the merit system or other requirements required by federal law, where applicable. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation-fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. (i) The Non-Federal entity establishes consistent written policies which apply uniformly to all faculty members, not just those working on Federal awards. Condition a. During our audit, on a sample of sixty (60) personnel files, we observed that the personnel files are not being kept current and in some instances were incomplete. b. The PRDH does not have established written policies and manuals which can define standard internal controls for each program and/ or region of the entity. Cause PRDH has not established an effective internal control designed to ensure the accuracy and completeness of the employee files. Also, the incompleteness of the files may depend on the time that the employee started working in the agency. Effect Due to law and regulation changes, incomplete files may result in inadequate documentation to support compliance with the criteria over management and administration of personnel files. Also, in the case of employees paid with federal funds it may result in cost disallowances for personnel that do not meet the requirements to be employed by the corresponding federal program. Questioned Costs None Perspective Information Finding does not represent a significant problem. The Department has addressed this finding and it's been taking the steps necessary to reduce incidences to a minimum. We selected 60 employee files from the agency. Prior Year Audit Finding 2022-002 Recommendation PRDH should immediately undertake a process to review all personnel files and validate that the minimum requirement documents are appropriately completed and included in each personnel file. Also, the PRDH must update the salary change form in file in order to reflect current salary as stated in the digital information system. Views of Responsible Officials The PRDOH agrees with the finding. However, PRDOH has implemented several corrective actions. The PRDOH established an internal control to ensure that the required documents are recorded in the files. The Director of Human Resources presented a work plan, in order to implement an effective procedure for reviewing files. A control sheet of documents required to the active records was established in which the Human Resources Officers of the regions and Hospital were requested to verify the employee's files for the required documentation that is need it in the files. Responsible Officials Ledo. Luis Rivera Villanueva Mrs. Luz S. Ramos Pedroza Mrs. Maribel Zayas Estimated Completion Date Sec. Auxiliar de Recursos Humanos Specialist Payroll Officer Director 787-765-2929 ext. 4273 787-765-2929 ext. 4273 787-765-2929 ext. 4209 Implementation is expected to be completed on or before the end of October 2024.
Criteria 2 CFR 200.303 establish that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.430 establishes that the cost of compensation for personnel services is allowable to the extent that it follows an appointment made in accordance with the governmental unit's laws and rules and meets the merit system or other requirements required by federal law, where applicable. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation-fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. (i) The Non-Federal entity establishes consistent written policies which apply uniformly to all faculty members, not just those working on Federal awards. Condition a. During our audit, on a sample of sixty (60) personnel files, we observed that the personnel files are not being kept current and in some instances were incomplete. b. The PRDH does not have established written policies and manuals which can define standard internal controls for each program and/ or region of the entity. Cause PRDH has not established an effective internal control designed to ensure the accuracy and completeness of the employee files. Also, the incompleteness of the files may depend on the time that the employee started working in the agency. Effect Due to law and regulation changes, incomplete files may result in inadequate documentation to support compliance with the criteria over management and administration of personnel files. Also, in the case of employees paid with federal funds it may result in cost disallowances for personnel that do not meet the requirements to be employed by the corresponding federal program. Questioned Costs None Perspective Information Finding does not represent a significant problem. The Department has addressed this finding and it's been taking the steps necessary to reduce incidences to a minimum. We selected 60 employee files from the agency. Prior Year Audit Finding 2022-002 Recommendation PRDH should immediately undertake a process to review all personnel files and validate that the minimum requirement documents are appropriately completed and included in each personnel file. Also, the PRDH must update the salary change form in file in order to reflect current salary as stated in the digital information system. Views of Responsible Officials The PRDOH agrees with the finding. However, PRDOH has implemented several corrective actions. The PRDOH established an internal control to ensure that the required documents are recorded in the files. The Director of Human Resources presented a work plan, in order to implement an effective procedure for reviewing files. A control sheet of documents required to the active records was established in which the Human Resources Officers of the regions and Hospital were requested to verify the employee's files for the required documentation that is need it in the files. Responsible Officials Ledo. Luis Rivera Villanueva Mrs. Luz S. Ramos Pedroza Mrs. Maribel Zayas Estimated Completion Date Sec. Auxiliar de Recursos Humanos Specialist Payroll Officer Director 787-765-2929 ext. 4273 787-765-2929 ext. 4273 787-765-2929 ext. 4209 Implementation is expected to be completed on or before the end of October 2024.
Criteria 2 CFR 200.303 establish that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.430 establishes that the cost of compensation for personnel services is allowable to the extent that it follows an appointment made in accordance with the governmental unit's laws and rules and meets the merit system or other requirements required by federal law, where applicable. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation-fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. (i) The Non-Federal entity establishes consistent written policies which apply uniformly to all faculty members, not just those working on Federal awards. Condition a. During our audit, on a sample of sixty (60) personnel files, we observed that the personnel files are not being kept current and in some instances were incomplete. b. The PRDH does not have established written policies and manuals which can define standard internal controls for each program and/ or region of the entity. Cause PRDH has not established an effective internal control designed to ensure the accuracy and completeness of the employee files. Also, the incompleteness of the files may depend on the time that the employee started working in the agency. Effect Due to law and regulation changes, incomplete files may result in inadequate documentation to support compliance with the criteria over management and administration of personnel files. Also, in the case of employees paid with federal funds it may result in cost disallowances for personnel that do not meet the requirements to be employed by the corresponding federal program. Questioned Costs None Perspective Information Finding does not represent a significant problem. The Department has addressed this finding and it's been taking the steps necessary to reduce incidences to a minimum. We selected 60 employee files from the agency. Prior Year Audit Finding 2022-002 Recommendation PRDH should immediately undertake a process to review all personnel files and validate that the minimum requirement documents are appropriately completed and included in each personnel file. Also, the PRDH must update the salary change form in file in order to reflect current salary as stated in the digital information system. Views of Responsible Officials The PRDOH agrees with the finding. However, PRDOH has implemented several corrective actions. The PRDOH established an internal control to ensure that the required documents are recorded in the files. The Director of Human Resources presented a work plan, in order to implement an effective procedure for reviewing files. A control sheet of documents required to the active records was established in which the Human Resources Officers of the regions and Hospital were requested to verify the employee's files for the required documentation that is need it in the files. Responsible Officials Ledo. Luis Rivera Villanueva Mrs. Luz S. Ramos Pedroza Mrs. Maribel Zayas Estimated Completion Date Sec. Auxiliar de Recursos Humanos Specialist Payroll Officer Director 787-765-2929 ext. 4273 787-765-2929 ext. 4273 787-765-2929 ext. 4209 Implementation is expected to be completed on or before the end of October 2024.
Criteria 2 CFR 200.303 establish that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.430 establishes that the cost of compensation for personnel services is allowable to the extent that it follows an appointment made in accordance with the governmental unit's laws and rules and meets the merit system or other requirements required by federal law, where applicable. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation-fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. (i) The Non-Federal entity establishes consistent written policies which apply uniformly to all faculty members, not just those working on Federal awards. Condition a. During our audit, on a sample of sixty (60) personnel files, we observed that the personnel files are not being kept current and in some instances were incomplete. b. The PRDH does not have established written policies and manuals which can define standard internal controls for each program and/ or region of the entity. Cause PRDH has not established an effective internal control designed to ensure the accuracy and completeness of the employee files. Also, the incompleteness of the files may depend on the time that the employee started working in the agency. Effect Due to law and regulation changes, incomplete files may result in inadequate documentation to support compliance with the criteria over management and administration of personnel files. Also, in the case of employees paid with federal funds it may result in cost disallowances for personnel that do not meet the requirements to be employed by the corresponding federal program. Questioned Costs None Perspective Information Finding does not represent a significant problem. The Department has addressed this finding and it's been taking the steps necessary to reduce incidences to a minimum. We selected 60 employee files from the agency. Prior Year Audit Finding 2022-002 Recommendation PRDH should immediately undertake a process to review all personnel files and validate that the minimum requirement documents are appropriately completed and included in each personnel file. Also, the PRDH must update the salary change form in file in order to reflect current salary as stated in the digital information system. Views of Responsible Officials The PRDOH agrees with the finding. However, PRDOH has implemented several corrective actions. The PRDOH established an internal control to ensure that the required documents are recorded in the files. The Director of Human Resources presented a work plan, in order to implement an effective procedure for reviewing files. A control sheet of documents required to the active records was established in which the Human Resources Officers of the regions and Hospital were requested to verify the employee's files for the required documentation that is need it in the files. Responsible Officials Ledo. Luis Rivera Villanueva Mrs. Luz S. Ramos Pedroza Mrs. Maribel Zayas Estimated Completion Date Sec. Auxiliar de Recursos Humanos Specialist Payroll Officer Director 787-765-2929 ext. 4273 787-765-2929 ext. 4273 787-765-2929 ext. 4209 Implementation is expected to be completed on or before the end of October 2024.
2023-002 Distribution of Compensation – Compliance and Internal Controls over Allowable Costs and Activities and Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.430(i) compensation records must support the distribution of the employee’s compensation among specific activities or costs objectives if the employee works on more than one Federal award and compensation of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner. Condition: There are no compensation records to support the distribution of employees’ compensation who work on multiple Federal awards. Effect: The lack of documentation and controls around how employees’ compensation is distributed between multiple Federal awards could result in the Association charging the same compensation to multiple awards. Cause: The Association was not aware of the requirements to maintain this documentation. Known Questioned Costs: $7,660 for FALN 10.561, $5,179 for FALN 14.231 Likely Questioned Costs: $63,347 for FALN 10.561, $26,971 for FALN 14.231 Perspective: This finding represents a systemic problem as it affects both the allowable activities and costs requirement as well as the matching requirement. Repeat Finding: Yes, this is a repeat of 2022-002. Recommendation: We recommend the Association establish policies and procedures to ensure that compensation is properly documented and distributed between Federal awards.
2023-002 Distribution of Compensation – Compliance and Internal Controls over Allowable Costs and Activities and Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.430(i) compensation records must support the distribution of the employee’s compensation among specific activities or costs objectives if the employee works on more than one Federal award and compensation of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner. Condition: There are no compensation records to support the distribution of employees’ compensation who work on multiple Federal awards. Effect: The lack of documentation and controls around how employees’ compensation is distributed between multiple Federal awards could result in the Association charging the same compensation to multiple awards. Cause: The Association was not aware of the requirements to maintain this documentation. Known Questioned Costs: $7,660 for FALN 10.561, $5,179 for FALN 14.231 Likely Questioned Costs: $63,347 for FALN 10.561, $26,971 for FALN 14.231 Perspective: This finding represents a systemic problem as it affects both the allowable activities and costs requirement as well as the matching requirement. Repeat Finding: Yes, this is a repeat of 2022-002. Recommendation: We recommend the Association establish policies and procedures to ensure that compensation is properly documented and distributed between Federal awards.
2023-002 Distribution of Compensation – Compliance and Internal Controls over Allowable Costs and Activities and Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.430(i) compensation records must support the distribution of the employee’s compensation among specific activities or costs objectives if the employee works on more than one Federal award and compensation of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner. Condition: There are no compensation records to support the distribution of employees’ compensation who work on multiple Federal awards. Effect: The lack of documentation and controls around how employees’ compensation is distributed between multiple Federal awards could result in the Association charging the same compensation to multiple awards. Cause: The Association was not aware of the requirements to maintain this documentation. Known Questioned Costs: $7,660 for FALN 10.561, $5,179 for FALN 14.231 Likely Questioned Costs: $63,347 for FALN 10.561, $26,971 for FALN 14.231 Perspective: This finding represents a systemic problem as it affects both the allowable activities and costs requirement as well as the matching requirement. Repeat Finding: Yes, this is a repeat of 2022-002. Recommendation: We recommend the Association establish policies and procedures to ensure that compensation is properly documented and distributed between Federal awards.
2023-002 Distribution of Compensation – Compliance and Internal Controls over Allowable Costs and Activities and Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.430(i) compensation records must support the distribution of the employee’s compensation among specific activities or costs objectives if the employee works on more than one Federal award and compensation of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner. Condition: There are no compensation records to support the distribution of employees’ compensation who work on multiple Federal awards. Effect: The lack of documentation and controls around how employees’ compensation is distributed between multiple Federal awards could result in the Association charging the same compensation to multiple awards. Cause: The Association was not aware of the requirements to maintain this documentation. Known Questioned Costs: $7,660 for FALN 10.561, $5,179 for FALN 14.231 Likely Questioned Costs: $63,347 for FALN 10.561, $26,971 for FALN 14.231 Perspective: This finding represents a systemic problem as it affects both the allowable activities and costs requirement as well as the matching requirement. Repeat Finding: Yes, this is a repeat of 2022-002. Recommendation: We recommend the Association establish policies and procedures to ensure that compensation is properly documented and distributed between Federal awards.
2023-002 Distribution of Compensation – Compliance and Internal Controls over Allowable Costs and Activities and Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.430(i) compensation records must support the distribution of the employee’s compensation among specific activities or costs objectives if the employee works on more than one Federal award and compensation of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner. Condition: There are no compensation records to support the distribution of employees’ compensation who work on multiple Federal awards. Effect: The lack of documentation and controls around how employees’ compensation is distributed between multiple Federal awards could result in the Association charging the same compensation to multiple awards. Cause: The Association was not aware of the requirements to maintain this documentation. Known Questioned Costs: $7,660 for FALN 10.561, $5,179 for FALN 14.231 Likely Questioned Costs: $63,347 for FALN 10.561, $26,971 for FALN 14.231 Perspective: This finding represents a systemic problem as it affects both the allowable activities and costs requirement as well as the matching requirement. Repeat Finding: Yes, this is a repeat of 2022-002. Recommendation: We recommend the Association establish policies and procedures to ensure that compensation is properly documented and distributed between Federal awards.
2023-002 Distribution of Compensation – Compliance and Internal Controls over Allowable Costs and Activities and Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.430(i) compensation records must support the distribution of the employee’s compensation among specific activities or costs objectives if the employee works on more than one Federal award and compensation of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner. Condition: There are no compensation records to support the distribution of employees’ compensation who work on multiple Federal awards. Effect: The lack of documentation and controls around how employees’ compensation is distributed between multiple Federal awards could result in the Association charging the same compensation to multiple awards. Cause: The Association was not aware of the requirements to maintain this documentation. Known Questioned Costs: $7,660 for FALN 10.561, $5,179 for FALN 14.231 Likely Questioned Costs: $63,347 for FALN 10.561, $26,971 for FALN 14.231 Perspective: This finding represents a systemic problem as it affects both the allowable activities and costs requirement as well as the matching requirement. Repeat Finding: Yes, this is a repeat of 2022-002. Recommendation: We recommend the Association establish policies and procedures to ensure that compensation is properly documented and distributed between Federal awards.
2023-002 Distribution of Compensation – Compliance and Internal Controls over Allowable Costs and Activities and Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022, 2022-2023 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022, 2022-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.430(i) compensation records must support the distribution of the employee’s compensation among specific activities or costs objectives if the employee works on more than one Federal award and compensation of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner. Condition: There are no compensation records to support the distribution of employees’ compensation who work on multiple Federal awards. Effect: The lack of documentation and controls around how employees’ compensation is distributed between multiple Federal awards could result in the Association charging the same compensation to multiple awards. Cause: The Association was not aware of the requirements to maintain this documentation. Known Questioned Costs: $7,660 for FALN 10.561, $5,179 for FALN 14.231 Likely Questioned Costs: $63,347 for FALN 10.561, $26,971 for FALN 14.231 Perspective: This finding represents a systemic problem as it affects both the allowable activities and costs requirement as well as the matching requirement. Repeat Finding: Yes, this is a repeat of 2022-002. Recommendation: We recommend the Association establish policies and procedures to ensure that compensation is properly documented and distributed between Federal awards.
Department of Health and Human Services Temporary Assistance for Needy Families (TANF), Federal Assistance Listing # 93.558 Pass Through Virginia Department of Social Services, Pass Through Entity Identifying Number BEN-21-054 Type of Finding: Material Weakness in Internal Control over Compliance with Federal Awards and Material Noncompliance Criteria: The Organization should have effective internal controls in place over tracking of employee time to federal grants and contracts, for the Activities allowed/Allowable costs compliance requirement, per 2 CFR 200.430(i). Condition: During the FY 2023 audit, it was noted that while employee timesheets were maintained, the timesheets did not document time allocable to federal programs for Q1 and the first month of Q2 (October 2022). Rather, timesheets related to the federal program reflected a percentage allocation equal to or less than the approved budget. Context: Out of the 25 samples that were tested, 9 did not have proper coding in the timesheet. The sample was not intended to be, and was not, a statistically valid sample. Cause/Effect: Internal control processes over payroll did not detect that employee timesheets did not appropriately capture time specifically chargeable to federal programs. Questioned Costs: $82,253, which was comprised of payroll charges to BEN TANF program for the time allocable to federal programs for Q1 and the first month of Q2 (October 2022). Identification of Repeat Finding: Repeat Finding 2022-001 Recommendation: We recommend that Cornerstones implements a system to properly track time charged to federal programs. In addition, we recommend that management implements internal controls to review and ensure that employee timesheets possess contemporaneous documentation of time spent on individual federal programs. Timesheets should be reviewed and approved in writing by employees’ supervisors. Views of Responsible Officials and Correction Action: Management’s response is reported in “Management’s Views and Corrective Action Plan” included at the end of this report.
Department of Health and Human Services Temporary Assistance for Needy Families (TANF), Federal Assistance Listing # 93.558 Pass Through Virginia Department of Social Services, Pass Through Entity Identifying Number BEN-21-054 Type of Finding: Material Weakness in Internal Control over Compliance with Federal Awards and Material Noncompliance Criteria: The Organization should have effective internal controls in place over tracking of employee time to federal grants and contracts, for the Activities allowed/Allowable costs compliance requirement, per 2 CFR 200.430(i). Condition: During the FY 2023 audit, it was noted that while employee timesheets were maintained, the timesheets did not document time allocable to federal programs for Q1 and the first month of Q2 (October 2022). Rather, timesheets related to the federal program reflected a percentage allocation equal to or less than the approved budget. Context: Out of the 25 samples that were tested, 9 did not have proper coding in the timesheet. The sample was not intended to be, and was not, a statistically valid sample. Cause/Effect: Internal control processes over payroll did not detect that employee timesheets did not appropriately capture time specifically chargeable to federal programs. Questioned Costs: $82,253, which was comprised of payroll charges to BEN TANF program for the time allocable to federal programs for Q1 and the first month of Q2 (October 2022). Identification of Repeat Finding: Repeat Finding 2022-001 Recommendation: We recommend that Cornerstones implements a system to properly track time charged to federal programs. In addition, we recommend that management implements internal controls to review and ensure that employee timesheets possess contemporaneous documentation of time spent on individual federal programs. Timesheets should be reviewed and approved in writing by employees’ supervisors. Views of Responsible Officials and Correction Action: Management’s response is reported in “Management’s Views and Corrective Action Plan” included at the end of this report.
2023-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - Passed through the Maine Department of Education: ALN: - 84.425 - Education Stabilization Fund ALN: - 84.010 - Title I - Grants to Local Educational Agencies Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303, 2 CFR 200.430(i) Condition: During audit procedures, it was identified that the school department does not follow a consistent, documented method to ensure employees were paid the proper amount ensuring that only allowable costs are being charged to the program. Cause: The school department does not have the necessary internal controls over compliance. Effect: The school department is at an increased risk for unallowable cost to be charged to the program. Identification of Questioned Costs: None identified. Context: The population for the test consisted of transactions of 121 payroll expenditures. 79 payroll samples were selected using the haphazard method. Of the 79 samples, we identified issues with 17 payroll charges. One employee contract accounted for 11 of those charges. The contract did not accurately describe the employee’s classification. The remaining 6 of the 17 payroll charges had insufficient documentation to support the amount paid. This is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the school department develop and implement internal policies and procedures to ensure that sufficient documentation to support the charge and to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Town of Millinocket School Department.
2023-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - Passed through the Maine Department of Education: ALN: - 84.425 - Education Stabilization Fund ALN: - 84.010 - Title I - Grants to Local Educational Agencies Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303, 2 CFR 200.430(i) Condition: During audit procedures, it was identified that the school department does not follow a consistent, documented method to ensure employees were paid the proper amount ensuring that only allowable costs are being charged to the program. Cause: The school department does not have the necessary internal controls over compliance. Effect: The school department is at an increased risk for unallowable cost to be charged to the program. Identification of Questioned Costs: None identified. Context: The population for the test consisted of transactions of 121 payroll expenditures. 79 payroll samples were selected using the haphazard method. Of the 79 samples, we identified issues with 17 payroll charges. One employee contract accounted for 11 of those charges. The contract did not accurately describe the employee’s classification. The remaining 6 of the 17 payroll charges had insufficient documentation to support the amount paid. This is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the school department develop and implement internal policies and procedures to ensure that sufficient documentation to support the charge and to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Town of Millinocket School Department.
2023-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - Passed through the Maine Department of Education: ALN: - 84.425 - Education Stabilization Fund ALN: - 84.010 - Title I - Grants to Local Educational Agencies Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303, 2 CFR 200.430(i) Condition: During audit procedures, it was identified that the school department does not follow a consistent, documented method to ensure employees were paid the proper amount ensuring that only allowable costs are being charged to the program. Cause: The school department does not have the necessary internal controls over compliance. Effect: The school department is at an increased risk for unallowable cost to be charged to the program. Identification of Questioned Costs: None identified. Context: The population for the test consisted of transactions of 121 payroll expenditures. 79 payroll samples were selected using the haphazard method. Of the 79 samples, we identified issues with 17 payroll charges. One employee contract accounted for 11 of those charges. The contract did not accurately describe the employee’s classification. The remaining 6 of the 17 payroll charges had insufficient documentation to support the amount paid. This is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the school department develop and implement internal policies and procedures to ensure that sufficient documentation to support the charge and to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Town of Millinocket School Department.
2023-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - Passed through the Maine Department of Education: ALN: - 84.425 - Education Stabilization Fund ALN: - 84.010 - Title I - Grants to Local Educational Agencies Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303, 2 CFR 200.430(i) Condition: During audit procedures, it was identified that the school department does not follow a consistent, documented method to ensure employees were paid the proper amount ensuring that only allowable costs are being charged to the program. Cause: The school department does not have the necessary internal controls over compliance. Effect: The school department is at an increased risk for unallowable cost to be charged to the program. Identification of Questioned Costs: None identified. Context: The population for the test consisted of transactions of 121 payroll expenditures. 79 payroll samples were selected using the haphazard method. Of the 79 samples, we identified issues with 17 payroll charges. One employee contract accounted for 11 of those charges. The contract did not accurately describe the employee’s classification. The remaining 6 of the 17 payroll charges had insufficient documentation to support the amount paid. This is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the school department develop and implement internal policies and procedures to ensure that sufficient documentation to support the charge and to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Town of Millinocket School Department.
2023-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - Passed through the Maine Department of Education: ALN: - 84.425 - Education Stabilization Fund ALN: - 84.010 - Title I - Grants to Local Educational Agencies Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303, 2 CFR 200.430(i) Condition: During audit procedures, it was identified that the school department does not follow a consistent, documented method to ensure employees were paid the proper amount ensuring that only allowable costs are being charged to the program. Cause: The school department does not have the necessary internal controls over compliance. Effect: The school department is at an increased risk for unallowable cost to be charged to the program. Identification of Questioned Costs: None identified. Context: The population for the test consisted of transactions of 121 payroll expenditures. 79 payroll samples were selected using the haphazard method. Of the 79 samples, we identified issues with 17 payroll charges. One employee contract accounted for 11 of those charges. The contract did not accurately describe the employee’s classification. The remaining 6 of the 17 payroll charges had insufficient documentation to support the amount paid. This is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the school department develop and implement internal policies and procedures to ensure that sufficient documentation to support the charge and to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Town of Millinocket School Department.
2023-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - Passed through the Maine Department of Education: ALN: - 84.425 - Education Stabilization Fund ALN: - 84.010 - Title I - Grants to Local Educational Agencies Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303, 2 CFR 200.430(i) Condition: During audit procedures, it was identified that the school department does not follow a consistent, documented method to ensure employees were paid the proper amount ensuring that only allowable costs are being charged to the program. Cause: The school department does not have the necessary internal controls over compliance. Effect: The school department is at an increased risk for unallowable cost to be charged to the program. Identification of Questioned Costs: None identified. Context: The population for the test consisted of transactions of 121 payroll expenditures. 79 payroll samples were selected using the haphazard method. Of the 79 samples, we identified issues with 17 payroll charges. One employee contract accounted for 11 of those charges. The contract did not accurately describe the employee’s classification. The remaining 6 of the 17 payroll charges had insufficient documentation to support the amount paid. This is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the school department develop and implement internal policies and procedures to ensure that sufficient documentation to support the charge and to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Town of Millinocket School Department.
2023-002 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - Passed through the Maine Department of Education: ALN: - 84.010 - Title I - Grants to Local Educational Agencies Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i) Condition: During the audit process it was identified that the School Department did not maintain sufficient documentation that reflected the work performed. Cause: The school department does not have the necessary internal controls over compliance. Effect: This School Department does not have records that reflect an accurate account of the employee’s time and effort devoted to the program, which could have allowed incorrect amounts to be charged to the grant. Identification of Questioned Costs: None identified. Context: The population for the test consisted of 53 payroll expenditures. We tested 18 out of 21 employees. The School Department completed time and effort certifications for all employees; however, the following issues were identified. 18 employees did not have the proper documentation for the distribution of their wages. The entity’s internal control noted that the direct supervisor overseeing the work completed should sign the documentation, where in these cases the superintendent signed. The documentation for 7 out of the 18 employees time and effort certifications were signed prior to the work being completed and the documentation for 2 out of the 18 employees noted an incorrect percentage charged to the grant. This is not a statistically valid sample. Repeat Finding: This is a repeat finding of 2022-001. Recommendation: It is recommended that the School Department implement internal control processes and procedures to ensure that time certifications are completed at the period end to ensure charges reflect an accurate account of the employee’s time devoted to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Town of Millinocket School Department.
2023-002 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - Passed through the Maine Department of Education: ALN: - 84.010 - Title I - Grants to Local Educational Agencies Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i) Condition: During the audit process it was identified that the School Department did not maintain sufficient documentation that reflected the work performed. Cause: The school department does not have the necessary internal controls over compliance. Effect: This School Department does not have records that reflect an accurate account of the employee’s time and effort devoted to the program, which could have allowed incorrect amounts to be charged to the grant. Identification of Questioned Costs: None identified. Context: The population for the test consisted of 53 payroll expenditures. We tested 18 out of 21 employees. The School Department completed time and effort certifications for all employees; however, the following issues were identified. 18 employees did not have the proper documentation for the distribution of their wages. The entity’s internal control noted that the direct supervisor overseeing the work completed should sign the documentation, where in these cases the superintendent signed. The documentation for 7 out of the 18 employees time and effort certifications were signed prior to the work being completed and the documentation for 2 out of the 18 employees noted an incorrect percentage charged to the grant. This is not a statistically valid sample. Repeat Finding: This is a repeat finding of 2022-001. Recommendation: It is recommended that the School Department implement internal control processes and procedures to ensure that time certifications are completed at the period end to ensure charges reflect an accurate account of the employee’s time devoted to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Town of Millinocket School Department.
Department of Health and Human Services 2023-003 Block Grants for Community Mental Health Services Criteria: Under 2 CFR 200.430(i)(1)(i) charges to Federal Awards for salaries and wages must be based on records that accurately reflect work performed and be supported with documentation that reasonable assure that the charges are accurate, allowable, and properly allocation and reasonably reflect the total activity for which the employee is compensated. Condition: The documentation to support reasonable assurance for salaries and wages consisted of documentation of when employees completed a therapy session but no clear documentation of how much time when employees were on-call or completed case notes for this grant. Cause: The documentation to support time and effort of employee’s salaries did not include all of the hour’s employees spent on the grant. The Center employees spend hours working outside the therapy session that relate to providing the best help for their clients’ needs. Effect: There is not proper documentation to support the allocation of time and effort that was charged to the grant. Auditor’s Recommendation: We recommend The Center remind its employees complete a personnel activity report that show all of the hours employees spend on the grant not rely just hours documented in the Center system used to track therapy sessions. Management response: While each grant budget and requirement is different, Management agrees with the recommendation as a more complete process for documenting the time and will work towards implementing the additional time coverage to our procedures.
FINDING 2023-001 Internal Control over Compliance and Compliance with Allowable Costs/Cost Principles Program: Federal Agency: Department of Health and Human Services Funding Year(s): 2/1/2020 – 3/31/2023 Federal Award: 90ZU0351-03-05 AL Number: 93.676 Criteria: The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition: During the audit, we noted an instance for which an employee was reinstated and received retroactive payment for the months of September through November 2022 for which we were not able to substantiate the allowability of the payroll charges. Cause: The Organization did not follow its policies and procedures in place to ensure compliance with the requirements allowable personnel costs. Effect: Failure to follow the Organization’s control system related to review and document payroll benefits so that only allowable costs are charged to the program can lead to noncompliance with federal statutes, regulations could lead to disallowed costs. Context: This is a condition identified based upon our review of the Organization’s compliance with specified requirements. Questioned Costs: $9,864 Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization strictly enforce its existing policies and procedures to ensure that all payroll costs including benefits charged to the federal awards are reviewed and documented for allowability.
FINDING 2023-001 Internal Control over Compliance and Compliance with Allowable Costs/Cost Principles Program: Federal Agency: Department of Health and Human Services Funding Year(s): 2/1/2020 – 3/31/2023 Federal Award: 90ZU0351-03-05 AL Number: 93.676 Criteria: The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition: During the audit, we noted an instance for which an employee was reinstated and received retroactive payment for the months of September through November 2022 for which we were not able to substantiate the allowability of the payroll charges. Cause: The Organization did not follow its policies and procedures in place to ensure compliance with the requirements allowable personnel costs. Effect: Failure to follow the Organization’s control system related to review and document payroll benefits so that only allowable costs are charged to the program can lead to noncompliance with federal statutes, regulations could lead to disallowed costs. Context: This is a condition identified based upon our review of the Organization’s compliance with specified requirements. Questioned Costs: $9,864 Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization strictly enforce its existing policies and procedures to ensure that all payroll costs including benefits charged to the federal awards are reviewed and documented for allowability.
Finding 2023-034: U. S. Department of Education ALN #84.010, Title I Grants to Local Educational Agencies (Title I) Grant #S010A220026 – 22A, S010A210026 – 21A, and S010A200026 – 20A Criteria: Federal regulation, 2 CFR 200.403(a) and (g), states that costs are allowable when necessary and reasonable for the performance of the federal award and adequately documented. Federal regulation, 2 CFR 200.430(i), states salaries and wages charged to a federal award must be based on records that accurately reflect the work performed. Paragraph 430(i)(1)(viii)(A) &(B) allows for budgeted estimates if the estimates produce reasonable approximations of the activity actually performed and significant changes are identified and entered into the records in a timely manner. Federal regulation, 2 CFR 200.303, requires non-Federal entities to, among other things, 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. Condition: The Office of Public Instruction’s (office) controls were not adequate to ensure compliance with federal regulations related to personal service costs. Questioned Costs: We question $1,900,796 in Title I costs, which is the amount of unsupported personal service costs. Context: Office personal service costs were allocated to the Title I program based on a budget in the state’s accounting system that was not supported by a time and effort certification. Office staff do not track time and effort to ensure amounts allocated to the Title I program are supported by actual records that reflect the work performed for the program. The office is allowed to use budget estimates but needs to track actual time to determine if those budget estimates are reasonable approximations of the activity performed. Effect: The office does not have controls to ensure that only allowable costs are allocated to Title I because there is not adequate support to demonstrate personal services costs are allocated to the federal program where work is performed. This resulted in questioned costs of over $1.9 million. Cause: Controls are not in place to require employees to track their time, so time and effort certifications are not completed periodically to ensure time is allocated to the correct programs. Office staff notes that the state’s accounting system is the official time record where employees report their time and supervisors approve and that employees have been directed to record their actual time worked by federal grant. However, five Title I employees reported using estimated percentages when recording their time. In addition, there is no documented control procedure instructing staff to record their actual time in the state’s accounting system. Recommendation: We recommend the Office of Public Instruction: A. Implement internal controls to ensure personal services costs are adequately documented and reflect actual time and effort for the Title I program. B. Allocate personal service costs based on support for actual time and effort on the Title I program, in accordance with federal regulations. Views of Responsible Officials: The office concurs with the recommendation. For additional information regarding the office’s planned corrective action see the Corrective Action Plan starting on page D-1.
Finding 2023-034: U. S. Department of Education ALN #84.010, Title I Grants to Local Educational Agencies (Title I) Grant #S010A220026 – 22A, S010A210026 – 21A, and S010A200026 – 20A Criteria: Federal regulation, 2 CFR 200.403(a) and (g), states that costs are allowable when necessary and reasonable for the performance of the federal award and adequately documented. Federal regulation, 2 CFR 200.430(i), states salaries and wages charged to a federal award must be based on records that accurately reflect the work performed. Paragraph 430(i)(1)(viii)(A) &(B) allows for budgeted estimates if the estimates produce reasonable approximations of the activity actually performed and significant changes are identified and entered into the records in a timely manner. Federal regulation, 2 CFR 200.303, requires non-Federal entities to, among other things, 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. Condition: The Office of Public Instruction’s (office) controls were not adequate to ensure compliance with federal regulations related to personal service costs. Questioned Costs: We question $1,900,796 in Title I costs, which is the amount of unsupported personal service costs. Context: Office personal service costs were allocated to the Title I program based on a budget in the state’s accounting system that was not supported by a time and effort certification. Office staff do not track time and effort to ensure amounts allocated to the Title I program are supported by actual records that reflect the work performed for the program. The office is allowed to use budget estimates but needs to track actual time to determine if those budget estimates are reasonable approximations of the activity performed. Effect: The office does not have controls to ensure that only allowable costs are allocated to Title I because there is not adequate support to demonstrate personal services costs are allocated to the federal program where work is performed. This resulted in questioned costs of over $1.9 million. Cause: Controls are not in place to require employees to track their time, so time and effort certifications are not completed periodically to ensure time is allocated to the correct programs. Office staff notes that the state’s accounting system is the official time record where employees report their time and supervisors approve and that employees have been directed to record their actual time worked by federal grant. However, five Title I employees reported using estimated percentages when recording their time. In addition, there is no documented control procedure instructing staff to record their actual time in the state’s accounting system. Recommendation: We recommend the Office of Public Instruction: A. Implement internal controls to ensure personal services costs are adequately documented and reflect actual time and effort for the Title I program. B. Allocate personal service costs based on support for actual time and effort on the Title I program, in accordance with federal regulations. Views of Responsible Officials: The office concurs with the recommendation. For additional information regarding the office’s planned corrective action see the Corrective Action Plan starting on page D-1.
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TWENTY-FIRST CENTURY COMMUNITY LEARNING CENTERS - AL NUMBER 84.287C PASS-THROUGH NUMBER 2607 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001.Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR section 200.430 requires that personnel expenses (payroll) charged to federal awards must be based on records that adequately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance through adequate documentation that the charges are accurate, allowable, and properly allocated. Additionally, the Arkansas Division of Elementary and Secondary Education (DESE) established grant guidance for the Twenty-First Century Community Learning Centers program, which states that timesheets must be signed by both the employee and the employee’s direct supervisor in the program, and the superintendent or district designee should sign timesheets for program directors. Condition: During our review of Twenty-First Century Community Learning Centers program payroll expenditures, we noted the following discrepancies: • Timesheet documentation was not provided for one employee for payments totaling $275. • Timesheets for three employees, totaling $1,030, were not signed by the employees' direct supervisor. Additionally, timesheets totaling $2,170 were not signed by the applicable employees. • Timesheets for two employees, totaling $418, appear to have been completed and signed by someone other than the employees. • The Site Coordinator was overpaid $1,920 for timesheets that conflicted with the employee’s existing contract. Additionally, timesheets totaling $7,580 were not signed by the employee’s direct supervisor. • The Program Director was overpaid $180 and $620, respectively, for hours that conflicted with the existing contract and for duplicate hours. Additionally, timesheets totaling $21,350 for the Site Director were not signed by the superintendent/district designee. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Questionable salary expenditures of $35,543 plus applicable fringe benefits of $8,050 were detected for the program. Questioned costs: Total questioned costs for the program were $43,593. Context: We examined all timesheets for the Program Director, Site Coordinator, Superintendent, and 3 additional program employees totaling $80,190 from a total population of 28 employees totaling $123,873. Our sample was statistically valid. Identification as a repeat finding: No Recommendation: The District should exercise proper oversight and implement proper internal controls over program expenditures. Additionally, the District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding compliance with federal regulations. Views of responsible officials: The district will ensure that proper timesheets are submitted and signed by the employee and the program director. The Mountain Pine School District will exercise proper oversight and implement proper internal controls over program expenditures. The district will contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding compliance with federal regulations.
Federal Agency: U.S. Department of Treasury CFDA No.: 14.218 Federal Program: Community Development Block Grants/Entitlement Grants Federal Award Year: 2023 Control Category: Allowable Costs Questioned Costs: $2,316 Condition The City charged CDBG payroll expenses to the program based a timesheet allocation and did not adjust the charges to reconcile to actual time incurred per employee timesheets. Criteria 2 CFR 200.430(i), Standards for Documentation of Personnel Expenses, states, in part: “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed…” Charges 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;…” And “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Cause The City's payroll system charges time for employees each pay period based on an allocation rather than actual hours documented on the employee’s timesheet. Effect Payroll costs charged to the program were greater than amounts supported by the documentation. Questioned Costs There were questioned costs in the amount of $2,316. Recommendation We recommend that the City charge time to the program based on actual hours worked per the employees' timesheets. Management’s Response Regarding Corrective Action Taken or Planned Management acknowledges the importance of ensuring that payroll costs charged to the program are consistent between the payroll system and the employee’s timesheet. The City continues to monitor its internal control process to ensure thorough review procedures are being followed. Timesheets are reviewed, bi-weekly, by payroll and adjusted to reflect actual hours as they relate to a specific activity. The City was able to hire a permanent accountant hiring who will provide additional oversight of these processes ensuring that hours worked are both reported correctly on the timesheets and are following the funding allocations that are approved by the grant.
2023-003 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures Identification of the Federal Program: Assistance Listing Number: 14.231 Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: E-20-MW-06-0026, E-21-MC-06-0026, E-22-MC-06-0026 Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-20-MW-06-0026, B-21-MC-06-0026, B-22-MC-06-0026, B-23-MC-06-0026 Program Income Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: - Be incorporated into the organization’s official records; - Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); - Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and - Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: Emergency Solutions Grant Program The City was unable to locate and provide the timesheets for (2) out of eleven (11) samples tested with Payroll Cost allocated to the Program. Within the overall population of a hundred and five (105) lines of ESG and ESGCV payroll charges, the City also had four (4) unsupported employee benefits charged to the program has benefit charged to program. Community Development Block Grants-Entitlement Grants Cluster Payroll costs for eighteen (18) out of forty (40) samples tested were allocated to programs were not supported by approved time samples or updated cost allocation methods/plan, nor were they reconciled to actual time spent on the various programs. Cause: The City did not adhere to its established policies and procedures for verifying that employee compensation charged to federal programs was supported by contemporaneous time records or an after-the-fact distribution of actual time and effort spent on federal program activities. Additionally, a thorough review and reconciliation of payroll time entries and postings from the old financial system (HTE) to the new financial system (MUNIS) was not conducted, resulting in the failure to preserve supporting documentation, such as timesheets, during the transition process. Effect or Potential Effect: The City did not comply with the program’s requirements for allowable costs. There is an increased risk that employees’ compensation charged to the program may not have represented an actual time and effort expended on the program’s activities. Questioned Costs: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend that the City enhance its internal controls over payroll processes by implementing policies and procedures that ensure employee compensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities. Additionally, all supporting documentation should be properly saved. Views of Responsible Officials: Management concurs with the finding.